HTX employs a funding rate arbitrage strategy to earn funding fees by hedging futures positions with spot holdings.

 

I. What Is Funding Fee?

Unlike traditional delivery futures, perpetual futures have no fixed expiry date. Without a mechanism to align prices, the futures price can diverge from the spot price of the underlying asset. To keep the futures price close to the spot price, a funding rate mechanism is introduced.

The funding rate determines the periodic payment exchanged between traders holding long and short positions in the perpetual futures market.

When the market is in a contango state (futures price higher than spot price), the funding rate is positive. In this case, traders holding long positions pay funding fees to traders holding short positions.

Conversely, when the market is in a backwardation state (futures price lower than spot price), the funding rate is negative. In this case, traders holding short positions pay funding fees to traders holding long positions.

 

Only positions held at the funding settlement time are subject to funding fees. Funding fee settlement intervals vary by trading pair. You can view the specific funding settlement interval for each pair on the perpetual futures trading page or the futures market information page.

 

For more details about the funding fee, please refer to "Funding Calculation".

 

II. How to Perform Futures Funding Rate Arbitrage?

Currently, HTX adopts a strategy of positive arbitrage. In the perpetual futures market, when the funding rate is positive, longs pay shorts. The strategy buys a certain quantity of assets in the spot markets. The platform simultaneously opens the perpetual futures short positions of equal value to offset price fluctuations and earn the funding fees from the perpetual futures markets.

 

Take BTC as an example

Suppose the current BTC price is 90,000 USDT. The HTX platform invests 90,000 USDT to buy 1 BTC in the spot market, and transfers an equal amount into the unified margin account to short 1 BTC in the BTCUSDT perpetual market (at 1x leverage). In this setup, spot gains and futures losses offset each other, regardless of price movements.

The BTCUSDT perpetual funding fee is settled three times per day at 08:00, 16:00 and 24:00 (UTC+8). If the funding rate at each settlement is +0.002% and the corresponding futures market price is 100,000 USDT, the earning details would be as follows:

1. Funding Fee PnL

Since the funding rate is positive and longs pay shorts, the PnL is as follows:

Funding rate arbitrage PnL of the day: 100,000 * 1 * 0.002% * 3 = 6 USDT

2. Spot and Futures PnL

Spot: +10,000 USDT

Futures: -10,000 USDT

Without considering fees and slippage, gains and losses offset each other. Under this fully hedged structure, directional price risk is neutralized.

Thus, the total PnL of the day is: 10,000 - 10,000 + 6 = 6 USDT.

 

 

Tradez n’importe quand et n’importe où avec l’App de HTX (iOS/Android)

Ouvrez un compte chez HTX pour obtenir des récompenses spéciales !

Parrainez des amis pour gagner jusqu'à 1500 USDT et 30% de leurs frais de trading

Retrouvez nous sur

Twitter:

https://x.com/htx_global

https://x.com/HTXCommunity

Facebook: https://www.facebook.com/HuobiFrancophone

Instagram: https://www.instagram.com/htxglobalofficial/

Reddit: https://www.reddit.com/r/HuobiGlobal/

Medium: https://htxofficial.medium.com/

Telegram:

https://t.me/htxglobalofficial

https://t.me/htxglobalofficial_2

https://t.me/HTXFutures_en

Discord：

https://discord.gg/htx-official

HTX se réserve le droit, à sa seule discrétion, de modifier, changer ou annuler cette annonce à tout moment pour une raison quelconque et sans préavis. Le contenu susmentionné n’est fourni qu’à titre informatif, HTX ne donne ni parrainage ni garantie en faveur de tout actif, produit ou promotion numérique sur HTX. Les prix des actifs numériques sont fortement volatiles et le trading comporte un haut risque. Veuillez consulter notre Avertissement sur les Risques.