Binance Smart Arbitrage Overview:
Smart arbitrage mainly hedges against market price fluctuations by holding positions in opposite directions in the spot market and the perpetual contract market. It focuses on collecting funding rates rather than profiting from price changes. When the funding rate is positive, short contracts and long spot will receive funding fees; vice versa.
Key benefits:
Low risk return: Manage risk through Delta hedging strategies to reduce the impact of price fluctuations on returns.
Earn funding fees: According to the changes in funding rates, users can earn fees by holding corresponding positions, and the income is relatively stable.
Automated management: No need for frequent manual operations by users, strategies run automatically.
Risk Warning:
Funding rate reversal: If the funding rate changes suddenly, you may need to pay fees instead of receiving them, which will affect your returns.
Widening spreads: Widening spreads between spot and futures may reduce returns and market conditions need to be monitored regularly.
Forced liquidation risk: Extreme market volatility may lead to forced liquidation, so it is particularly important to manage margin well.
How to participate:
1. Visit Binance Finance: Go to the Binance Finance page and select Smart Arbitrage.
2. Choose a strategy: Decide on the investment amount and select your preferred portfolio. Smart arbitrage strategies will automatically manage your positions.
3. Subscription: Click Subscription to start. After confirming the investment amount, you can start.
4. Keep a close eye on your portfolio: After you subscribe, you can track your positions in My Portfolio or Financial Account. You can view the size of your positions, funding fees charged, and market value.
5. Redeem and close: If you want to end the strategy, please visit your financial account and click Redeem to close the position.
6. Immediately earn income using Binance Smart Arbitrage and collect funding fees using this method.
Tips:
The automation and lower risk of smart arbitrage are indeed attractive, but it is not completely risk-free. Although this strategy is suitable for experienced traders who want to earn stable returns, both funding rates and market volatility may affect the final return. Investors are advised to have a deep understanding of the market before subscribing and regularly monitor positions and rate changes. After all, smart arbitrage may seem simple, but its sensitivity to market changes cannot be ignored, especially for a market environment with drastic short-term fluctuations.
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