Perpetual futures prices differ from spot prices depending 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 purchase spot assets, take a short position in futures to hedge price fluctuations, and earn income through funding rates. Using real-time data, we have compiled top assets showing profit opportunities through high funding rates. [Editor's Note]
As of June 15th, 12:10, according to DataMaxiPlus, the most efficient funding rate strategy involves Lagrange(LA). When taking a long position on MEXC futures and a margin short position on gate.io spot market, a -0.1198% funding rate applies, with an annualized return of approximately 10.49%, expecting annual earnings around $52,000.
For Axelar(AXL), a strategy of going long on Bitget futures and short on Bitget, Bybit, or Binance spot markets anticipates an annual return of 8.07%, with potential annual earnings of about $40,000.
Additionally, Animecoin(ANIME) with a long position on Bybit futures and short positions on Binance, OKX, or Bybit spot markets applies a -0.1605% funding rate, expecting annual earnings of around $35,000. An ANIME strategy through Hyperliquid futures can also record estimated earnings exceeding $30,000 with an annual return of 6.80%.
Such strategies involve holding assets in a long position in futures markets while hedging through margin short positions in spot markets. When funding rates are negative, one receives funding rates in futures while reducing price volatility risks through margin shorts. However, margin trading incurs interest and fees, so strategies must consider the actual net return after deductions.
Assets maintaining deeply negative funding rates in the short term are considered suitable for short-term strategies due to low entry barriers relative to potential earnings.
Current Highest and Lowest Funding Rate Assets
๐ผ Top 5 Highest Funding Rates
โฒHTX's SWARMS(Annual 177.34%)
โฒgate.io's PORTAL(Annual 180.02%)
โฒgate.io's WEMIX(Annual 107.20%)
โฒgate.io's LSK(Annual 136.88%)
โฒMEXC's CATS(Annual 56.72%)
๐ฝ Bottom 5 Lowest Funding Rates
โฒgate.io's WEMIX(Historical low -0.003408)
โฒgate.io's PORTAL(Historical low -0.001407)
โฒgate.io's LSK(Historical low -0.001451)
โฒMEXC's CATS(High volatility record)
โฒHTX's SWARMS(Including some negative records)
When funding rates are high or positive, long position demand is high, making futures prices relatively more expensive than spot prices, requiring longs to pay shorts. Investors can secure funding rate income by implementing spot purchase and futures short (short selling) strategies.
Conversely, when funding rates are low or negative, short position demand increases, making futures prices lower than spot prices, requiring shorts to pay longs. Investors can maximize funding rate arbitrage by utilizing spot selling and futures long strategies.
Funding rate arbitrage is a strategy targeting stable income regardless of market volatility, usable even when long-term market direction is difficult to predict. However, as funding rates are highly variable based on participant 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 outcomes are the sole responsibility of the investor.]
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