Funding rate arbitrage is a relatively stable strategy.
Principle:Perpetual contracts have a funding rate mechanism, with long and short positions settling periodically. When the rate is positive, longs pay shorts; when negative, the opposite occurs.
Arbitrage Method:- Buy BTC in the spot market
- Short an equivalent amount of BTC in the futures market
- Collect the funding rate
- Hedge against price volatility risk
- Assuming a rate of 0.01% per 8 hours
- Daily profit: 0.03%
- Annualized: approximately 11%
- The rate may fluctuate
- Transaction fees need to be considered
- Extreme market conditions may pose risks
- Capital utilization is not high
This strategy is suitable for players seeking stable returns.
