Delta-Neutral Spot and Perpetual Funding Arbitrage

Summary

The document describes a crypto arbitrage approach that pairs a spot purchase with a short position in perpetual futures for the same asset. The matched positions are intended to reduce exposure to broad price moves, while the strategy seeks returns from funding fee differences. It also describes a bot update that automates placement of the two positions for eligible users, replacing a previously manual process.

The explanation is brief and does not provide rules for choosing assets, sizing positions, managing changing exposure, or exiting trades. Delta neutrality can reduce directional risk, but it does not remove funding-rate, basis, liquidity, execution, or liquidation risks. The notice specifically warns that pre-market futures may have lower liquidity, higher volatility, and greater liquidation risk, and that underlying tokens may never be listed. No performance data or evidence of returns is supplied.

Key ideas

• The described strategy buys an asset in spot markets while shorting an equivalent amount in perpetual futures.
• The paired positions aim to reduce sensitivity to price fluctuations while earning from funding differences.
• The bot update automates order placement for eligible users who previously placed the positions manually.
• Delta neutrality does not eliminate funding, basis, liquidity, execution, or liquidation risks.
• Pre-market futures carry additional risks, and their underlying tokens may not ultimately be listed.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.