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【Practical Information on Futures and Spot Arbitrage📒】


First, the essence of the structure
Same currency and quantity: a spot long position + a perpetual contract short position (1:1), equal hedging between both sides, and profiting from basis convergence.
Second, three-dimensional assessment (to determine feasibility)
1️⃣ Annualized basis return = (contract price − spot price) / spot price × 365 / number of holding days
2️⃣ After deducting fees: funding rate (settled every 8 hours) + contract opening and closing fees + spot asset withdrawal and transfer fees
3️⃣ Start only when the net annualized return reaches ≥ 15%; at 5%-15%, reduce the position size; below 5%, do not approach it at all
Third, four indicators for timing selection
• Monitor the perpetual contract funding rate trend: shorting the perpetual contract and collecting the return is more stable when the rate is positive
• Monitor the basis curve: a healthy structure has a premium in the farther months; beware of a reversal when the near-month premium exceeds 3%
• Monitor spot market depth: do not open a position until the order-book depth on either side reaches ≥ 500,000 USDT
• Monitor the macroeconomic window: during the 24 hours before earnings announcements/Federal Reserve decisions/mainnet upgrades, only close positions and do not open new ones
Fourth, position-size limits and discipline🚨
• Each group ≤ 5% of total capital, and the total of three groups for the same currency ≤ 15%
• When the basis converges to 0.3% or lower, close the position in batches and do not get greedy for the last gain
• If the marked price of the perpetual contract deviates from the index by more than 1%, immediately switch to read-only mode without executing trades
• In extreme cases (±8% within one day), close the perpetual contract leg first to preserve capital, and handle the spot leg the next day
Fifth, staged exit
• When the basis contracts to 0.5%: close 50%
• When it contracts to 0.2%: close an additional 30%
• Place a conditional order to lock in the final 20% of the position
Conclusion: Futures and spot arbitrage is about collecting basis rent, not betting on direction. Before opening any position, ask yourself first: after deducting all fees, is this trade still profitable?#Gate打金狗独家支持0Gas交易
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BigBullBrother66
【Practical Spot-Futures Arbitrage Tips📒】

I. Structural Essence
Same coin, same amount: long spot + short perpetual contract (1:1), equal-amount hedging on both legs to capture basis convergence.

II. Three-Dimensional Calculation (determines whether it is viable)
1️⃣ Annualized basis = (contract price − spot price) / spot price × 365 / holding days
2️⃣ Deduct fees: funding rate (settled every 8 hours) + contract opening and closing fees + spot withdrawal and transfer fees
3️⃣ Only act when net annualized yield ≥ 15%; for 5%-15%, reduce position size; <5% is always off-limits

III. Four Timing Checks

• Check the direction of the perpetual funding rate: shorting perpetuals to collect funding is more stable when the rate is positive
• Check the basis curve: a healthy premium structure in the far month; be alert for a reversal when the near-month premium >3%
• Check spot market depth: only open a position when one-sided order-book depth ≥ 500k USDT
• Check the macro window: only close positions and do not open new ones during the 24 hours before earnings reports/Fed decisions/mainnet upgrades

IV. Position and Discipline Red Lines🚨

• Each group ≤ 5% of total capital; no more than 15% across three groups in the same coin
• Close positions in batches when the basis converges to within 0.3%; do not chase the final bit
• If the perpetual mark price deviates from the index by >1%, immediately observe only and take no action
• In extreme market conditions (±8% in a single day), close the perpetual leg first to stay safe, and handle the spot leg the next day

V. Staged Exit

• When the basis narrows to 0.5%: close 50%
• When it narrows to 0.2%: close another 30%
• Set a conditional order for the remaining 20% to lock in the tail position

Core principle: Spot-futures arbitrage is a business of collecting basis rent, not betting on direction. Before opening each position, ask yourself—after deducting all fees, is this trade still profitable?#Gate打金狗独家支持0Gas交易
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