Funding CoinFUNDING COIN · TOOLS & LEARNING
How Funding Rate Arbitrage Works — Example & Risks
Understand long and short comparisons, payment intervals and why a funding difference is not net profit.
Two legs
A long in an asset on one exchange is compared with a short on another. Comparable positions have opposing price exposure, but each leg can still be liquidated.
Illustrative example
With identical settlement periods, a long paying 0.01% and short receiving 0.03% produce a 0.02% notional difference before costs. At 1,000 USDT per leg that is 0.20 USDT.
Why the result differs
Rates change and payment schedules may differ. Account for entry and exit fees, spread changes, liquidity, margin, restrictions and exchange failures. Opposite positions do not make a trade risk-free.
Exchange reference: Bybit funding · Binance funding