Perpetual futures have price differences based on market sentiment. The futures market adjusts these price differences through the Funding Rate. When futures prices are high, longs pay shorts, and when low, shorts pay longs to balance spot and futures prices. By utilizing this structure, an investment strategy exists where one can buy spot assets, take a short position in futures to hedge price fluctuations, and earn income through funding rates. We have compiled top assets showing profit opportunities through real-time data with high funding rates. [Editor's Note]
As of May 2nd, 12:10, according to DataMaxiPlus, ALPACA and MOVE showed the highest profit rates in funding rate-based arbitrage strategies.
ALPACA has a -0.0350 funding rate when taking a margin short position on Bitget and holding a futures long position on MEXC, with an expected annual funding rate income of approximately $383,328.08. The annualized return of this strategy reaches 76.75%. Additionally, a combination selling spot on Gate.io and buying futures on MEXC also presented similar profit potential.
For MOVE, with a spot short on Binance and a futures long position on Bybit, a -0.0066 funding rate applies, with an annualized return of 28.91% and annual income of about $144,375.47. Moreover, similar funding rates (-0.0128) were confirmed across various exchanges like Bitget, Huobi, and OKX, offering around $139,548.72 in annual income opportunities.
This strategy involves holding assets in a long position in the futures market and hedging with a margin short position in the spot market. When the funding rate is negative, futures long positions receive funding rates, while margin short positions reduce price volatility risks.
However, margin trading incurs costs such as interest and fees, so a realistic profit analysis considering these factors is necessary. Especially in recent times, assets maintaining deeply negative funding rates can realize profits in short holding periods, making the strategy relatively easier to execute.
Current Highest and Lowest Funding Rate Assets
Top funding rate assets indicate long positions are dominant, while assets with low or negative funding rates signal concentrated short positions.
๐ผ Top 5 Highest Funding Rates
โฒ SIREN on Bitget (0.001238)
โฒ Stader(SD) on Gate.io (0.001103)
โฒ Monero(XMR) on Binance (0.00082528)
โฒ Monero(XMR) on MEXC (0.000825)
โฒ Slerf(SLERF) on HTX (0.000807)
๐ฝ Bottom 5 Lowest Funding Rates
โฒ SIREN on Bitget (-0.013879)
โฒ Monero(XMR) on MEXC (-0.08456)
โฒ Monero(XMR) on Binance (-0.008541)
โฒ Stader(SD) on Gate.io (-0.003776)
โฒ Slerf(SLERF) on HTX (0.0002)
When funding rates are high or positive, long position demand is high, making futures prices relatively more expensive than spot prices, requiring long positions to pay shorts. Investors can secure funding rate income by implementing spot purchase and futures short selling strategies.
Conversely, when funding rates are low or negative, short position demand is high, making futures prices lower than spot prices, requiring short positions to pay longs. Investors can maximize funding rate arbitrage by utilizing spot selling and futures long strategies.
Funding rate arbitrage is a strategy that can aim for stable income regardless of market volatility, usable even when long-term market direction is difficult to predict. However, as funding rates are highly variable depending on market participants' position ratios, a strategic approach considering funding rate differences between exchanges and capital costs is necessary.
[This article does not provide financial advice, and investment results are the sole responsibility of the investor.]
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