Contract Arbitrage Mastery: Making Money Safely is Not a Dream!
If you want to handle large amounts of funds, you need to learn the trick of hedging spot contracts, which is a surefire way to make profit without loss. Perpetual contracts incur funding fees three times a day, and there are plenty of arbitrage opportunities in this. The specific operation is to find two exchanges and compare which one has a higher funding fee. Open a short position where the fee is higher and a long position where the fee is lower, ensuring the price, margin, and leverage are the same. This way, with a hedge, the funding fee is easily obtained. The leverage should ideally be between 5 to 10 times; too high risks liquidation, and too low is not cost-effective, while frequent adjustments incur troublesome fees.
Now let's talk about leveraged contract arbitrage, a great way to increase fund utilization. For example, if you have 10,000 USDT, you can borrow some USDT from an exchange with a daily interest rate of only 0.02%—very cost-effective. Then, find a contract with a cumulative funding fee of no less than 0.03% per day, and you can start making money.
Previously, I used 10,000 USDT to leverage buy 1 BTC on Gate exchange and opened a short position of 1,000 BTC/USDT on Bigone exchange. The daily funding fee can be around 0.1% to 0.2%, ensuring profit without loss. Finding high funding fee coins relies on your own efforts, and some software can help. I once encountered a funding fee as high as 6%, which was astonishing!
When it comes to risks, slippage is a headache. The buy and sell prices on both sides need to match, and generally, a limit order can handle it unless there are significant market fluctuations; otherwise, there won’t be any issues. If you buy at a low price with leverage and open a short position at a high price, you can still make some profit from the price difference. When selling with leverage, set the order price slightly higher than the contract stop-loss price to reduce slippage risk.
Another risk is loss. If the price goes up and you sell at the set price, you won’t incur losses. But if the price suddenly retraces, and the leverage is hit to the liquidation price while the contract is forcibly liquidated, you might end up losing money. Therefore, during significant retracements, it’s best to close positions in advance; safety first!
Recently, I plan to ambush a potential coin that is about to explode, doubling my investment should be quite simple. At the same time, I'm looking for some potential coins to hold until the end of the year, with an expected upside of over 10 times being quite feasible. If you want to keep up, please like and leave a message for free sharing.