Cash and Carry Trade

Also known as basis trading or buying the basis, a cash and carry trade is an arbitrage position made up of a long cash position together with a short position in the corresponding futures contract. For example, a trader buys a cash or physical commodity, such as coffee, and also sells a futures contract for the same quantity. This will make a profit as long as the cash price, plus the cost of storing and insuring the coffee (the cost of carry) until the futures contract falls due, is less than the money received for selling the futures contract

See also: Carry Trade