How to obtain stable returns in market fluctuations has always been the focus of investors. After #HMSTR开盘 , Binance released the #SuperEarn (Super Earning Coin) 🧧 event, which allowed me to find a way to take away 🚀28,000 HMSTR in 7 days, and found that this is a long-term arbitrage opportunity. With just three easy steps, you can earn a lot of Binance listed new coins in each event!
Before understanding the strategy, let’s first understand two basic concepts:
What is Binance Super Earn?
Binance Super Earn is a limited-time financial product that allows users to subscribe to newly launched token projects and earn high returns. The special thing about this type of product is that the project will fully sponsor the event and provide an annualized rate of return that is much higher than that of ordinary Binance financial products: Ton and this time Hamster both have a return of 300%.
The main features of Super Earn Coins:
Limited time activities: Each Super Coin Earning Product launched has a clear time limit, usually 7 days or less.
Project sponsorship: The annualized rate of return is fully sponsored by the token project, without any additional fees.
High annualized rate of return: Usually higher than ordinary Binance financial products, suitable for investors seeking short-term high returns.
What is hedging arbitrage?
Hedging arbitrage is a common strategy in the investment field. Its purpose is to reduce the impact of market fluctuations on investment returns by conducting two transactions in opposite directions at the same time. Specifically in the application of Binance Super Earning Coin, the hedging strategy can help investors lock in the price fluctuation risk at the time of subscription when participating in financial products, thereby ensuring the stability of expected returns.
The basic steps of hedging arbitrage:
Buy Spot: Purchase a certain amount of a newly listed token (such as Hamster or Toncoin).
Open a short order: Open an equal number of short orders (short tokens) in the futures market at the same time to offset the risk of falling token prices.
Subscribe for Super Earn Coins: Use the subscription of Super Earn Coins to obtain high returns, and at the same time hedge the fluctuations of spot prices through short orders to achieve the goal of locking in profits.
The above three steps are the basic steps of this arbitrage strategy.
Profit calculation and detailed step-by-step guidance
Taking Hamster (HMSTR) as an example, Binance provides a 7-day limited subscription opportunity for the project, with a quota of 50,0000 HMSTR per person and an annual interest rate of 300%.
1. Assume we purchase 500,000 coins at $0.006$HMSTR , the cost is 3,000 USD, after putting it into Binance Super Earning Coin, you can earn 500000*300%/365*7=28767 coins in 7 days$HMSTR . Equivalent to 167 US dollars.
2. However, this strategy will have a risk, that is, the loss of tokens caused by the decline of HMSTR price. Assuming it falls to $0.005, our principal will lose about 16.6%, about $500. Although the income is still 28,767 HMSTR, the value becomes $143, so we need a tool to hedge this part of the loss. Therefore, we need to use $HMSTR perpetual contract for hedging, because after the price of the currency falls, the short order will have a certain income, which is enough to cover our principal loss and reward loss.
3. How to use the hedging strategy. First, our principal is 500,000 HMSTR and the reward is 28,767 (temporarily replaced by 30,000). Then we need to hedge the risk of 530,000 HMSTR falling within seven days, so we need to open a position of 530,000 HMSTR (worth $3,180). Taking 10x leverage as an example, you need to open a short order of HAMSTR-USDT perpetual contract at a price of $0.006 and $318.
Note: The greater the contract leverage, the higher the risk. Bai Zhou generally uses 2-5 times leverage. I hope that readers will set leverage according to their own risk situation.
4. After subscribing to the Super Coin Earning product and opening a short position, you can wait for the coin earning period to end. After the end, Binance will transfer the coin earning assets to the current financial management account. You need to transfer from the current financial management account to the trading account, and then sell HMSTR spot and close the HMSTR contract at the same time. In this way, you can pocket $167, but because a 7-day contract is opened, there will be a certain contract rate. With the current daily interest rate of about 0.03%, the loss of the 7-day contract is only about 0.21%. If the difference in the short order rate is calculated, the total loss is actually between 0-0.21%, which is very small compared to the income.
Operation diagram:
If you have any other questions, please leave a message and discuss in the comment section below. You are also welcome to follow the [Baizhou] account. Baizhou will release detailed tutorials as soon as possible when the next super coin earning and similar activities occur!
About Baizhou
Former VC researcher and exchange product manager in the cryptocurrency circle, CS bachelor + finance MBA, with 5 years of experience in crypto trading, good at exploring low-risk arbitrage strategies, interpreting market hot spots and judging secondary market trends. Update daily to bring you the latest investment strategies.
Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
