bitcoin spot SO 0 : receive 0 FO 0 keep 0
example...spot SO 40 : receive 40.490889377162 FO 39
S0 : Spot price today
F0 : Futures or forward price today
T: Time until delivery date (expressed in years)
r: Risk-free interest rate for maturity T (also expressed in years)
Therefore one can make an arbitrage profit by taking advantage of the difference between F0 and S0 (1+r)^T FO=40(1.05)^0.25 = 40.5 Suppose that you short the stock, receive $40, and invest the $40 for 3 months at the risk-free rate. At the same time, you enter into a long futures contract. In 3 months, you must buy the stock (since you entered a contract to buy) and you pay $39 (the futures price). You receive from your investment $40x(1+0.05)^(3/12) = $40.49 You get to keep: $40.49 - $39 = $1.49 with no risk/investment.