Let’s talk about rate arbitrage:
rule
When funding rates are negative, we go long perpetuals and short quarters.
When the funding rate is positive, we are short perpetual and long quarterly.
Example
Take BNB as an example. If it is negative, we will go long the perpetual contract, receive the funding rate and short the quarterly contract to hedge the perpetual contract.
In this way, we can achieve long-short hedging and receive funds at a high rate!
risk
Premium reversal (resulting in a large loss when the entire order is re-opened) Funding rate reversal (resulting in long and short hedging still continuing to pay the other party)
income
Contract face value * hourly funding rate + - premium
