YGG basis widening: Spot and perpetual prices separate, pay attention to these things.

The spot price of YGG is quoted at 0.93, while the perpetual price is 0.75, which is a difference of 0.22. This is called the basis. When there is a large difference between the spot price and the perpetual contract price of the same currency, this situation is usually called "basis" The gap widens". The widening of the basis may cause some reactions and impacts in the market:

1. Arbitrage opportunities: Large basis spreads may attract arbitrage traders, who will take advantage of price differences to conduct arbitrage transactions. Arbitrage traders will simultaneously buy low-priced currencies in the spot market and sell high-priced contracts in the perpetual contract market to make profits. These carry trade activities may cause basis spreads to gradually converge towards normal levels.

2. Insufficient liquidity: A large basis may lead to liquidity imbalance between the spot market and the perpetual contract market. Traders may prefer to trade in a market with more profitable prices, leading to reduced liquidity in another market.

3. Market instability: A widening basis may reflect volatility in market sentiment and expectations, and therefore may contribute to overall market instability. Investors and traders may feel uncertain, increasing market risk.

4. Changes in capital liquidity: The expansion of the basis may affect the liquidity of capital. Investors may move funds to markets with more profitable prices, leading to reduced liquidity in other markets.

5. Trading Opportunities: A widening basis provides trading opportunities for active traders. They can perform position sizing and hedging operations based on market conditions to take advantage of price differences.

Overall, a widening basis may cause instability and imbalance in the market, but it also provides trading opportunities for carry traders. In the case of widening basis, market participants need to pay close attention to market dynamics and conduct transactions and risk management with caution. At the same time, fluctuations in basis may also be affected by various factors such as market liquidity, supply and demand, market sentiment, and macroeconomic factors. YGG is also predicted.