Foundations · Chapter 2 of 31
Spot vs futures: what is the difference?
Owning an asset now versus agreeing a price to settle later, and why the two markets move together but not identically.
In the spot market you buy the asset itself and own it immediately. In the futures market you agree on a price now to settle at, or over, a later time, without necessarily holding the asset.
Leverage and shorting
Spot is straightforward ownership. Futures let you use leverage and profit from falling prices by going short, which makes them powerful but riskier.
They track each other
Arbitrage keeps the two prices close, but a gap can open up. That gap, called the basis, is itself a signal about leverage and demand.
How to read it here
Our derivatives signals come from futures, while portfolio values use spot prices. Knowing which market a number comes from helps you read it correctly.
Now watch this signal update in real time across the market.
See it liveEducational content, not financial advice.