A few days ago, when Magic Eden announced its collaboration with Trump to launch a wallet, regardless of the authenticity of the news, ME surged nearly 40% at that moment. This was a great opportunity to determine if arbitrage could be achieved through short selling.
First, open the K-line on Coinglass and observe it with the chart. You can see that during explosive rises, the increase in price is driven by contracts (the spot CVD and contract CVD are clearly diverging). A healthy increase should be driven by both spot and contracts simultaneously, not just by contracts pushing it unilaterally. This often indicates that the market maker is choosing to pump the price based on news to sell off.
Next, how to safely short sell? Simply put, it's about using low leverage with a large margin (this time I opened a position with 20% of my contract margin) to push the liquidation price to a level that the market maker cannot reach, and then just wait for the market maker to sell (I will write a tutorial on short selling if someone requests it).
Follow me, before I make enough money to retire, I will selflessly share my arbitrage methods. If you don't follow, it's your loss.
