Question 1

What is basis, in plain terms?

Accepted Answer

How far the perpetual contract sits from the spot price of the same token. Contract above spot — basis is positive; below — negative.

Question 2

What does a large positive basis tell me?

Accepted Answer

That longs are crowded: leverage is being overpaid for, funding is usually positive too and longs are the ones paying it. Gaps like that tend to snap shut rather than drift shut.

Question 3

How do people trade basis?

Accepted Answer

They take both sides at once: buy spot and sell the future (or the reverse when basis is negative). The position does not depend on market direction and closes when the two prices meet.

Question 4

Why is basis huge on small coins?

Accepted Answer

Thin books: on an illiquid contract a single order moves the price. We discard pairs with no size behind the price, but what is left still deserves a look — a large basis almost always means you can only enter small.

Question 5

How do I get alerts about basis?

Accepted Answer

Build a rule in the builder: what to watch, on which exchanges, from which threshold. The notification arrives as a Telegram direct message.