Perpetual futures prices differ from spot prices depending on market sentiment. The futures market adjusts these price differences through the Funding Rate. When futures prices are high, longs pay shorts, and when low, shorts pay longs to balance spot and futures prices. By utilizing this structure, an investment strategy exists where one can buy spot assets, take a short position in futures to hedge price fluctuations, and earn income through funding rates. We have compiled top assets showing profit opportunities through real-time data with high funding rates. [Editor's Note]
According to DataMaxiPlus as of June 7th at 12:10 PM, MASK currently shows the highest funding rate arbitrage yield. Taking a margin short position on OKX with $10,000 and holding a futures long position on Binance, the strategy applies a -0.0075 funding rate, with an annualized return of 65.7%. The expected annual income for this strategy is approximately $328,151.
Similar strategies can be found with Huobi's spot margin short and Binance's futures long combination, also recording a 65.7% annualized return. Strategies using Bitget and gate.io are providing similar return levels.
Meanwhile, a strategy taking a long position on Bybit and a short position on OKX offers an attractive income opportunity with a funding rate of -0.00734, still providing an annualized return of 64.34% and annual income of approximately $321,368.
These strategies involve maintaining a long position in futures while simultaneously holding a short position in spot or margin markets to hedge price risks. When the funding rate is negative, investors holding long positions in futures can realize income by receiving funding rates. However, margin short positions incur interest and fees, which must be carefully considered when calculating actual returns.
Current Highest and Lowest Funding Rate Assets
๐ผ Top 5 Highest Funding Rates
โฒgate.io's SC (187.57%)
โฒgate.io's CHEEMS (182.87%)
โฒHashKey Global's ETH (156.63%)
โฒgate.io's LSK (151.77%)
โฒgate.io's CAT (113.22%)
๐ฝ Bottom 5 Lowest Funding Rates
โฒgate.io's LSK (-0.001451)
โฒgate.io's CHEEMS (-0.001038)
โฒgate.io's CAT (-0.000085)
โฒHashKey Global's ETH (volatility exists)
โฒgate.io's SC (intermittent decline cases)
High funding rates indicate concentrated long position demand, while low or negative rates suggest short position dominance. Funding rate arbitrage is a strategy to profit from natural interest rate differences in the cryptocurrency market, requiring careful review of asset transfer times, slippage, and trading fees before trading.
When funding rates are high or positive, long position demand increases, making futures prices relatively higher than spot prices, requiring longs to pay shorts. Investors can secure funding rate income by implementing spot purchase and futures short selling strategies.
Conversely, when funding rates are low or negative, high short position demand causes futures prices to be lower than spot prices, requiring shorts to pay longs. Investors can maximize funding rate arbitrage by utilizing spot selling and futures long strategies.
Funding rate arbitrage is a strategy targeting stable income regardless of market volatility, usable even when long-term market direction is difficult to predict. However, as funding rates are highly variable based on market participant position ratios, a strategic approach considering funding rate differences between exchanges and capital costs is necessary.
[This article does not provide financial advice, and investment outcomes are the sole responsibility of the investor.]
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