Funding Rate Arbitrage Calculator
Long spot + short perp = delta-neutral. Pocket the funding rate as yield.
How it works: buy the coin on spot, open equal-sized short on perp. If funding is positive, you collect it every 8h. Price risk = zero (delta neutral).
Full breakdown
- Funding can flip negative — you PAY instead of earning
- Exchange counterparty risk on both legs
- Short perp liquidation if collateral insufficient
- Basis risk: spot/perp price divergence on exit
What this calculator shows
Funding rate arbitrage is a delta-neutral trade: buy the coin on spot, open an equal-sized short on the perpetual future, so price moves cancel out. What's left is the funding payment — collected every 8h when funding is positive. This calculator nets that income against spot and perp trading fees on both entry and exit, then annualizes it so you can compare the real yield against other opportunities.
Common mistakes
• Ignoring fee round-trips. Entry AND exit fees hit both legs — four fee events, not one. • Assuming funding stays positive. It can flip negative mid-trade, turning income into a cost. • Under-collateralizing the short. Higher leverage frees up capital but shrinks your liquidation buffer if funding moves against you before you exit. • Forgetting basis risk. Spot and perp prices can diverge slightly at exit, adding or subtracting a bit versus the funding math alone.
FAQ
Is funding rate arbitrage risk-free?
No — it's low price risk, not zero risk. You're still exposed to funding flipping negative, exchange counterparty risk on both legs, liquidation on the short if collateral runs low, and basis risk between spot and perp prices at exit.
How often is funding paid?
Most exchanges settle funding every 8 hours (3 times a day), which is what this calculator assumes. Some venues use different intervals — check the exchange's funding schedule before sizing a real position.
What happens if funding turns negative?
You pay instead of earning. If you're still delta-neutral, price risk stays zero, but the position now costs money each funding period — most traders close out once cumulative negative funding erases the accrued profit.