First, let's talk about Funding Fee. It is a fee applied to prevent price differences between Spot and Futures Transactions. It is generally paid every 8 hours.
The dominant party pays the other party. For example, if the Long position is larger, those in the Long transaction pay those in the Short transaction. This payment takes place between users and is not a fee paid to the exchange. What is the logic of Funding Rate Arbitrage?
Funding Rate Arbitrage aims to make a profit by taking a reverse position in the Spot Market for the same transaction pair of users' positions in the Forward Market, that is, by balancing the position on both sides in a situation where there will be neither profit nor loss, and the funding fee paid in between. For example, in the Forward Market, the funding fee is at a + (positive) value. If the funding fee
Since short position holders will be paid, you can open a Short position in Bitcoin and then purchase an equivalent value of BTC in the Spot Market. In this way, it can benefit from the funding fee. How to access real-time and historical Funding Rate Arbitrage data?
To view Funding Rates Arbitrage data, go to Binance Futures and click on Information -> Arbitrage Data above. Then click on the Funding Rate Arbitrage option above the table. You can access Funding Rates Arbitrage data directly here. The data you see here makes estimated 3-day income calculations. Based on the data here, you can calculate Profit/Loss and take part in a logical arbitrage opportunity.
Don't forget to follow for more such information :)
