90% of people in the crypto space stare at K-lines guessing price movements, but no one tells you: the real guaranteed profit opportunities lie in 'arbitrage.' No need to guess trends, no need to watch the market until dawn; you can lock in profits by exploiting market rule loopholes. Today, I will break down two zero-risk arbitrage strategies for you to easily grasp and for beginners to easily make their first 'passive income.'
1. Funding rate arbitrage: taking the 'fixed salary' from the contract market
The funding rate rules for perpetual contracts essentially provide 'red envelopes' for arbitrageurs. When the funding rate is positive, long positions pay short positions; when negative, it reverses. What we need to do is to be the 'receiving party.'
Positive arbitrage (a must-learn for beginners, with risks approaching zero)
Core logic: When the funding rate is positive, buy spot + short contracts to earn passive income from the funding rate.
Practical steps (using BTC as an example):
Spot purchase: Use 2000 USDT to buy BTC in the spot market;
Shorting contracts: shorting an equivalent of 2000 USDT of BTC in the perpetual contract market (1x leverage to avoid liquidation risk);
Waiting to collect money: funding fees settle every 8 hours. Assuming a rate of 0.03%, single yield = 2000×0.03% = 0.6 USDT, three times a day equals 1.8 USDT.
Profit calculation:
Average daily profit of 1.8 USDT, annualized return = (1.8×365) ÷ 2000 = 32.85%;
Even if the BTC price drops by 50%, the losses in spot will be offset by the gains from the contract short, resulting in only profits.
Key reminders:
Only select periods with funding rates > 0.01% to operate (rates that are too low won't cover transaction fees);
Must use 1x leverage; high leverage will amplify risks in extreme market conditions;
Prioritize platforms with good depth (e.g., Binance, OKX) to avoid slippage eating into profits.
2. Price difference arbitrage: earning stable money from 'price timing'
When there is an 'unreasonable gap' between spot and contract prices, arbitrage opportunities arise. It's like the same bottle of water sells for 3 yuan in a convenience store and 5 yuan in a supermarket; we buy in the convenience store and sell in the supermarket, securing a guaranteed 2 yuan difference.
1. Spot-futures arbitrage (the classic risk-free strategy)
Core logic: At the expiration of contracts, prices will converge towards the spot price, profiting from the price difference before expiration.
Case breakdown:
Spot price 65000 USDT, contract price for expiration in 3 months 69000 USDT, price difference 4000 USDT;
Operation: Buy 1 spot BTC (spending 65000) + short 1 contract BTC (selling 69000);
Settlement at expiration: Assuming at expiration both spot and contract drop to 60000 USDT:
Spot loss of 5000 USDT, contract short gains 9000 USDT, net gain of 4000 USDT (after deducting transaction fees of about 3800 USDT).
Points to note:
Choose contracts with an expiration time of 1-3 months, and operate when the price difference > 2% (covering transaction fees);
Must wait for the contract to expire and settle automatically; do not manually close positions midway to avoid the risk of price differences widening.
2. Period arbitrage (earning from the 'time difference' of different contracts)
Core logic: The price differences of contracts for the same cryptocurrency with different expiration dates will periodically narrow.
Practical scenarios:
Next week's BTC contract price 10050 USDT, next quarter's contract price 10000 USDT, price difference 50 USDT;
Operation: Go long 1 next quarter contract (buy low) + short 1 next week contract (sell high);
Closing timing: when the price difference shrinks to 10 USDT, close positions simultaneously for a net gain of 40 USDT.
Advantages:
Not affected by the rise and fall of cryptocurrency prices, only earning from the fluctuations in price differences;
Suitable for volatile markets; the more sideways the market, the more stable the price difference tends to be.
2. Methods to obtain real-time arbitrage opportunities
The simplest method: warning + boat carving!
1. Funding rate monitoring
In a bullish market, funding rates are often positive; the higher the rate, the more eager long traders are, and the higher the arbitrage profits. However, rates can change; too high may lead to a market correction, too low may become negative, so set an appropriate threshold.
If you don't want to keep staring at the market, use the rate warning feature. For example, for Binance's BTC perpetual contract, historical data shows that when the rate exceeds 0.03%, it is suitable for arbitrage, so set this warning line. When selecting coins, prioritize those with large market capitalization, high trading volume, and increasing open interest.
2. Price difference monitoring
Taking OKX's spot and quarterly contracts as an example:
Manual method: Calculate the price difference between contracts and spot yourself, set a threshold for alerts, but it takes too much time.
Recommended method:
1. Combined K-lines: Use AICoin to synthesize new K-lines from spot and contract prices, directly showing the price difference. When the price difference widens, there is an arbitrage opportunity, and it can also compare price premiums between different platforms, such as the price difference between Binance and Coinbase.
When the price difference starts to widen, consider price difference arbitrage opportunities.
2. Custom indicators
The biggest advantage of this method is that it can simultaneously plot the price differences of multiple currency pairs.
After plotting, you can also compare past trends and then set a threshold for alerts.
For example, when the price difference between the quarterly contract and spot price reaches 2200, there is a significant arbitrage opportunity, so we can define the warning condition and set up alerts.
Extension:
Based on the rules of funding rates and price differences, use custom indicators for real trading.
Trading cryptocurrencies is about repeatedly doing simple things. By consistently using one method over a long time, you can master it. Trading can become as skillful as any other profession, where practice makes perfect, allowing you to make decisions effortlessly.
This year marks my seventeenth year trading cryptocurrencies. I started with 10,000 and now support my family through trading! I can say that I've tried 80% of the methods and techniques in the market. If you want to treat trading as a second profession to support your family, sometimes listening and observing more can uncover insights beyond your current understanding, allowing you to avoid at least five years of detours!
Follow me @加密大师兄888 to keep up with trends and get rich together! Bulls and bears coexist.