Rates from Binance fapi and Bybit linear APIs. Refreshed on page load. APR = spread × 3 × 365. Break-even assumes 0.20% total fees (4 trades at 0.05% taker). This is not financial advice.
How funding arbitrage works
In perpetual futures, funding rates are periodic payments between longs and shorts. When the rate is positive, longs pay shorts. When negative, shorts pay longs. The key insight: each exchange sets its rate independently based on its own order flow.
If Binance has rate +0.03%/8h and Bybit has −0.02%/8h for the same pair, you can:
- Short on Binance — receive the +0.03% every 8h (shorts get paid)
- Long on Bybit — receive the 0.02% every 8h (longs get paid when rate is negative)
- Net collect: 0.05%/8h = 0.15%/day = 54.75%/APR — delta neutral, no directional risk
The real risks
- Liquidation asymmetry. If one leg moves adversely, that exchange may liquidate you before the other leg can profit. Use low leverage (1–3×) and maintain extra margin.
- Entry/exit fees. You pay taker fees to open and close both positions — typically 0.05% × 4 = 0.20% total. On a small spread, this dominates.
- Withdrawal/deposit timing. Moving funds between exchanges takes time. The opportunity may close while you're in transit.
- Exotic pairs = thin liquidity. The highest APR opportunities are usually on low-volume pairs where you can't size meaningfully without slippage eating the spread.
What size actually makes sense
For a 0.05%/8h spread (54%/APR) and $5,000 per leg:
- Entry fee: $5,000 × 0.05% × 4 = $10 total
- Funding per 8h: $5,000 × 0.05% = $2.50
- Break-even: $10 / $2.50 = 4 periods = 32 hours
- Monthly income (if rates hold): $2.50 × 3 × 30 = $225/month
On majors (BTC, ETH) where spreads are small (0.001–0.005%/8h), the fee cost dominates and arb is rarely worth it. The real opportunities are in mid-cap pairs with divergent exchange order flow — but those carry more rate-flip risk.