5x Leverage Arbitrage on Negative Funding Rate

We have prepared each lesson in both text and video formats

In this case, we will demonstrate funding rate arbitrage using the example of the API3 token.

On Bybit, the negative funding rate is -3%.

Meanwhile, on Phemex, the negative funding rate is -1.8%.

We opened a long position on Bybit and a short position on Phemex, as short traders pay funding to long traders. This way, we receive 3% and lose 1.8%, resulting in a spread of +1.2%.

We took a somewhat risky approach by entering the trade with 5x leverage. With this leverage, the funding rate also increases fivefold, meaning our profit is +6%.