Perpetual futures have price differences depending on investment 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. There is an investment strategy that involves buying spot assets, taking a short position in futures to hedge price fluctuations, and earning profits through funding rates. We have compiled top assets showing profit opportunities with high funding rates based on real-time data. [Editor's Note]
As of August 17th at 21:45, according to DataMaxiPlus, the asset providing the largest profit opportunity in a delta-neutral strategy utilizing funding rate differences is Ancient8(A8).
A strategy of taking a margin short position on HTX and holding a futures long position on Bybit applies a funding rate of -0.00413, expecting an annualized return of 9.05%, with annual profits of approximately $45,164.52. Similarly, a Gate.io spot short and Bybit futures long strategy offers the same return and profit opportunity.
The third and fourth strategies, combining HTX or Gate.io spot short positions with MEXC A8 futures long positions, are expected to generate annual profits of about $45,158.29 when applying the same funding rate of -0.00413.
The fifth strategy using Altura(ALU) involves holding a long spot position on HTX and taking a Gate.io futures short position, with a funding rate of 0.002608, an annualized return of 5.71%, and expected profits of approximately $28,509.05. Similar profits can be expected by structuring spot positions on MEXC or Gate.io with the same Gate.io futures short position.
For Koma Inu(KOMA), taking a Gate.io futures short position and establishing a long spot position on MEXC or Gate.io is analyzed to have an annual return of 5.33%, with profits of about $26,605.66.
Lastly, for Succinct(PROVE), a strategy of Gate.io futures long + Bitget spot short combination presents a funding rate of -0.000422, offering annual profit opportunities of approximately $18,445.13.
These strategies are risk-free arbitrage strategies utilizing funding rate differences between futures and spot markets, which are particularly advantageous when funding rates are negative. However, various market factors such as liquidity, slippage, fees, and transfer times must be considered when actually implementing these strategies.
๐ Highest and Lowest Funding Rate Data
๐ผ Top 5 Highest Funding Rates
โฒGate.io's Altura(ALU/USDT): Annual 5.71% (0.002608)
โฒGate.io's Koma Inu(KOMA/USDT): Annual 5.33% (0.002434)
โฒHTX's MemeFi(MEMEFI/USDT): Annual 3.34% (0.001524)
โฒBinance's Monero(XMR/USDT): Annual 2.71% (0.0024719)
โฒMEXC's Monero(XMR/USDT): Annual 2.71% (0.002471)
๐ฝ Bottom 5 Lowest Funding Rates
โฒHTX's MemeFi(MEMEFI/USDT): -0.001704
โฒGate.io's Koma Inu(KOMA/USDT): -0.000177
โฒBinance's Monero(XMR/USDT): -0.00003763
โฒMEXC's Monero(XMR/USDT): -0.000033
โฒGate.io's Altura(ALU/USDT): 0.000252
The highest funding rate indicates strong long position demand, while the lowest or negative funding rates signal short position dominance. Traders need a strategic approach considering funding rate differences between exchanges, fees, and periods.
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 funding rates to short positions. Investors can secure funding rate profits by buying spot and implementing short (short selling) futures 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 funding rates to long positions. Investors can maximize funding rate arbitrage by selling spot and implementing long futures strategies.
Funding rate arbitrage is a strategy that can aim for stable profits regardless of market volatility, 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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