To profit from short positions on Binance, here are two distinct strategies that can help you earn returns—even while markets are heading down:
1. Leave a Short Position Open to Receive Funding Fees
When trading perpetual futures (e.g., BTC/USDT) on Binance, funding fees are exchanged every 8 hours between long and short holders. Crucially:
If the funding rate is negative, short positions receive funding from longs.
If positive, shorts pay the fee.
Binance itself doesn’t collect these fees—they’re exchanged peer-to-peer .
So if you hold a short position during periods of negative funding, you earn income passively just for maintaining the position .
How to benefit:
Monitor funding rates (shown on Binance Futures).
Open a short position on a perpetual contract when rates are negative.
Hold it across the 8-hour funding interval(s) to receive the payment.
2. Use Binance's Funding Rate Arbitrage Bot
Binance has introduced a Funding Rate Arbitrage Bot, which automates a "carry trade" strategy using both spot and futures markets:
Positive Carry: Buy spot, short futures → collect funding if rates are positive.
Reverse Carry: Sell spot, go long futures → collect funding if rates are negative markets.businessinsider.com.
This tool simplifies setup, especially for those who want an easy, automated way to capture funding fees without manual trading.
Summary Table
StrategyHow It WorksBenefit for Short PositionsManual short in futuresHold during negative funding periodsReceive funding payments from long holdersFunding Rate Arbitrage BotCombines spot + futures in opposite directionsAutomates earning from funding gaps (especially when negative)
Key Tips Before You Begin
Funding rates can flip quickly—often due to market volatility—so timing matters Coincu.
You must keep your position open at the funding snapshot (00:00, 08:00, 16:00 UTC).
Be aware of margin and liquidation risk—funding income doesn’t offset significant losses from adverse price moves.
The bot may have regions or eligibility restrictions—check your access markets.businessinsider.com.
##tl;dr
To get paid while shorting on Binance: target negative funding rates and hold through the funding cycle.
For automation and simplified execution, try the Funding Rate Arbitrage Bot to automatically collect from funding fee inefficiencies.