Many friends trading contracts have large capital and hope to achieve stable returns. Next, we will introduce a set of stable return funding rate arbitrage strategies within the circle.
In the digital currency market, due to the large fluctuations in contract prices, they often exceed the spot prices. Exchanges have introduced funding rates to balance the price difference between contracts and spots. Especially during bull markets, contract prices tend to be much higher than spot prices.
At this time, many investors began to use BTC spot to hedge contracts to earn funding rates and achieve stable appreciation of assets.
Many friends may know this strategy, but have not actually operated or calculated specific values. Taking March 11, 2024, at 4:00 PM as an example (as shown in the figure). The funding rate reached 0.1195%. Calculated three times a day, it amounts to 0.3585%. The annualized return is 130.8525%. This is a real screenshot, and a single return can reach 373 U.
Don't get too excited at this point; this high value is also rare. Based on historical data, the actual comprehensive annualized return is around 40%, depending on the duration ratio of bull and bear markets.
Next, we will introduce the specific gameplay.
Taking 710,000 U as the principal, with the latest price at 71,000. Buy 10 BTC in spot while simultaneously using a joint mode to short 10 BTC with BTC. At this time, the rise and fall of the coin price is completely hedged, and the fluctuations in the coin price will not affect the principal. Afterwards, you can start to net earn the funding rate. Based on the above figure of 0.1195%, calculate 710,000 * 0.1195% = 848 U. This time, the funding rate settlement is 848 U. Converted to RMB, 8487.44 = 6312 yuan.
Some friends may consider that buying so much at once will incur slippage, and there is also a time difference between the spot and contract markets. The fluctuations in the coin price in between will lead to certain risks. The software can perfectly solve this problem, allowing for simultaneous ordering of contracts and spots at the minimum trading volume, which can minimize slippage and the difference in coin price fluctuations.
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