Funding rate arbitrage

Funding rate arbitrage is holding a long on one venue and a short on another in the same asset, with no view on price, to collect the difference in funding. It works because crowding is not the same on every venue, and the costs that eat it are fees and spread on both legs.

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In the help centreLearn what a perpetual contract is on Mochatrade
  • Funding rateThe funding rate is the periodic payment between longs and shorts that keeps a perpetual near the real price: above…
  • Perpetual futuresPerpetual futures are contracts that track an asset's price with no expiry date. Expiry is what pulls a normal future…
  • Round-trip trading costRound-trip cost is everything a trade costs from entry to exit: the spread twice, the fee twice, slippage, and funding…
  • Perpetual premium (basis)The perpetual premium, or basis, is the gap between a perpetual's price and its reference. A positive premium means…
  • ROE (return on equity in trading)ROE in trading is your profit or loss as a percent of the margin you posted, not of the position. At 10x a 1% move is…
  • Bid-ask spreadThe bid-ask spread is the gap between the best price to sell (bid) and the best price to buy (ask). Buy at the ask…

Educational content only. Not investment advice. Leveraged products magnify losses as well as gains.

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