Manual Cryptocurrency Futures and Spot Spread Hedging

Summary

This document describes a semi-automated workflow for manually hedging cryptocurrency futures against spot positions across multiple symbols. It tracks both venues' quotes and account positions, displays the futures–spot spread, and provides controls to open or close positive and reverse arbitrage positions. The order logic selects sides and prices from the bid and ask quotes, checks available margin or spot assets, and adjusts order amounts to venue constraints.

The example uses a futures simulator and a spot simulator. The author reports opening and closing a hedge, then observes a loss when the spread was too small to cover fees. This illustrates why entry and exit decisions need to account for trading costs and slippage. The strategy depends on exchange interfaces and a specific library, so the document says it cannot be backtested in its described setup. The author recommends simulated operation during testing; the reported live use is brief and is not evidence of reliable profitability.

Key ideas

• The workflow pairs futures contracts with corresponding spot assets across multiple symbols.
• It uses bid and ask prices to choose opposing futures and spot orders for each hedge direction.
• Before trading, it checks available margin, spot holdings, existing positions, and venue-specific order sizing.
• A test trade lost money when the spread did not cover fees, highlighting the need to include fees and slippage.
• The described exchange-interface setup cannot be backtested, and the author recommends simulated testing.

Tags

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