Today I will introduce to you a special quantitative tool: spot-like order.

What is a quasi-spot order? As the name suggests, it is similar to a spot order. It is a contract grid that benchmarks the spot. By setting a specific leverage, the appropriate entry position is specified, and then the grid parameters are set accordingly.

What are the benefits of spot orders? First of all, spot orders have the traditional quantitative arbitrage function, reducing costs through cyclic arbitrage within the range. Daily arbitrage can achieve a net profit of more than 1%. Second, the retracement ratio is extremely small. When a decline occurs, the retracement range of a spot-like order is only two-thirds of that of the spot of the same name, which means it is more resilient than the spot. The third point is that the strong parity price is negative and there is no need to consider stop loss. In essence, the principle is the same as the second point, both of which are achieved by sacrificing leverage multiples to achieve stability.

What are the disadvantages of that type of spot order compared to spot orders? The biggest disadvantage is that it is rare. Spot orders have strict entry conditions. During a period of unilateral surge, it may happen that not a single currency in the market can meet the entry conditions. Of course, this situation is rare, and even if it happens, it will not happen. Just wait with a short position. The second point is the funding rate. The funding rate is generally less than one-tenth of the matching profit. In other words, as long as the running time exceeds one-tenth of the grid holding time, you can completely defeat the spot.

Generally speaking, this is a strategy with strict triggering conditions, but once the triggering conditions are met to enter the market, the winning rate can reach more than 95%, and the retracement is also very small. It is a spot-like order that compares to the spot but is better than the spot.