A risk-free spread is the difference between the cash and futures prices that can be locked in through arbitrage, without taking on any market risk. This spread is considered risk-free because it is based on the price difference between two identical assets in different markets, rather than on any market movement or price fluctuation.

Here's how it works:

1. Identify a price discrepancy between the cash market and the futures market.

2. Buy the asset in the cash market at the lower price.

3. Sell the same asset in the futures market at the higher price.

4. Lock in the spread by simultaneously buying and selling the asset in both markets.

The risk-free spread is the difference between the two prices, and it represents a profit that can be earned without taking on any market risk. This spread is also known as the "arbitrage spread" or the "basis".

It's important to note that while the spread itself is risk-free, there may be other risks associated with the trade, such as:

- Liquidity risk: The risk of not being able to buy or sell the asset quickly enough or at a fair price.

- Counterparty risk: The risk of the other party defaulting on their obligations.

- Funding risk: The risk of not being able to fund the trade.

However, the spread itself is considered risk-free, as it is based on the price difference between two identical assets in different markets.