Capture funding rate payments through delta-neutral perpetual positions.
Delta neutralAdvanced
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Typical APY range5% - 50%
What is Basis Trading?
Basis trading exploits the difference between perpetual futures prices and spot prices. When perps trade at a premium (contango), longs pay shorts a funding rate. By holding spot long and perp short, you capture this funding while being delta-neutral.
How It Works
Buy 1 ETH spot
Short 1 ETH perpetual
Net exposure: 0 (delta-neutral)
Collect funding payments when positive
Key Considerations
Funding Rates: Change every 8 hours, can be negative
Capital Efficiency: Need collateral for both positions
Execution: Must maintain hedge accuracy
Costs: Trading fees and potential slippage
Best Conditions
Works best when:
Market is bullish (positive funding)
High leverage demand
Stable or ranging prices
Track funding rates with Fensory.
How to Get Started
1Monitor funding rates across venues
2Calculate position sizes for neutrality
3Open spot long position
4Open equal perpetual short
5Collect funding payments
6Rebalance as needed
Pros
✓Market-neutral returns
✓Can be very profitable in bull markets
✓Systematic strategy
Cons
✗Funding can turn negative
✗Requires active monitoring
✗Capital intensive
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