The essence of spot arbitrage is speculation on the basis of spot index and futures index. The change of basis can be analyzed and predicted, and correct analysis can make a profit. Even if the analysis is wrong, the risk of arbitrage is much lower than that of one-way speculation.

Spot arbitrage refers to a futures contract. When there is a price difference between the futures market and the spot market, it uses the price difference between the two markets to make a profit by buying low and selling high. Theoretically, the futures price is the future price of commodities, and the spot price is the current price of commodities. According to the same price theory in economics, the difference between them, that is, "basis" (basis = spot price-futures price) should be equal to the holding cost of the commodity.