Spot, futures, basis, funding, CEX↔DEX — where the risk sits in each and which to pick for your situation.
«Arbitrage» is one word for six different occupations. They share a principle: the money comes from prices disagreeing, not from where the market goes next. But their risks, their speed and what they demand of your capital differ — and mixing them up is expensive.
Spot against spot
You buy the token where it is cheaper and sell it where it is dearer. The most straightforward version — and the most demanding logistically: the coin has to move between exchanges.
The main risk here is not price but withdrawals. A closed withdrawal or a congested network eats the difference while you wait for the transfer. See: spot arbitrage.
Futures against futures
The same token, but both legs are perpetual contracts on different exchanges. Nothing has to be moved: both sides are positions.
In exchange, a cost of its own appears — funding. While the positions are open each side pays or receives, and holding for long can eat the whole spread. See: futures arbitrage.
Spot against futures — basis
You buy spot and sell the future (or the reverse) and collect the convergence. The position is market-neutral: the direction of the market barely matters.
The price of that neutrality is funding and capital tied up on two venues at once. See: basis.
Funding divergence
Here the thing you are trading is not the price at all but the rate. You go long where funding is paid to you and short where it is charged. The income arrives period by period.
One subtlety: exchanges settle funding at different intervals — CEXs usually every 8 hours, DEXs every hour. Raw percentages are not comparable; they have to be restated per day. See: funding arbitrage.
CEX against DEX
On decentralised venues liquidity is thinner and there are fewer participants, so the gaps run noticeably wider than ordinary cross-exchange ones.
What is specific here is not the price but the execution: gas, slippage in the pool and block time. On a wide gap that is bearable; on fractions of a percent it is almost always a loss. See: CEX ↔ DEX and futures against DEX.
How to choose
Briefly: if you would rather not deal with transfers, start with futures and funding gaps. If you are willing to keep money on two exchanges and you want neutrality, look at basis. Spot offers the most direct opportunities, but it requires the coin's withdrawal to be open right now.