Funding Arbitrage: How Basis Risk Changes the Result
A funding difference can look attractive until basis, fees and execution change the result. Work through a hypothetical hedge and a JustScreener checklist.
A hedge still has moving parts
Buying a coin on spot and shorting the same quantity through a perpetual contract is a familiar way to seek positive funding. The two legs reduce directional price exposure; they do not turn the position into a deposit.
Basis is the difference between a derivative price and its spot price. A change in that difference changes the hedge result. Equal dollar values do not always mean equal underlying quantities, so check the contract size and type.
Two venues also bring separate access, transfer, collateral and liquidation risks. When price rises, a spot gain does not automatically top up margin held at another exchange. A screener does not transfer funds or manage those risks.
Calculate the result of both legs
Suppose you buy one coin at 100 USDT and short a linear perpetual for one coin at 101. Later, you sell the spot coin at 105 and close the short at 108. Spot makes 5 USDT; the short loses 7. The combined price result is −2 USDT because basis widened from 1 to 3.
Assume the position received 1.50 USDT of funding and incurred 0.80 USDT in total fees and slippage. The result is −2 + 1.50 − 0.80 = −1.30 USDT. These are illustrative figures, not current rates; they show why a funding difference is not the final profit.
Costs include entry and exit on both legs. Compare venue rates on the same time basis and check their actual settlement intervals. If one leg fails to fill or fills partially, the unmatched exposure temporarily becomes directional.
Use JustScreener to start the investigation
The funding-arbitrage screener helps find rate differences between venues. The funding screener monitors individual rates. For the example’s spot-plus-short-perpetual hedge, first check the contract’s own funding rate. The cross-exchange screener compares rates on two perpetuals: that is a different setup requiring its own calculation.
- Match the underlying asset, contract type, quantities and settlement times.
- Estimate payments, four executions, possible slippage and basis changes.
- Check each leg's margin buffer and your exit plan after a partial fill.
Set your search conditions, then assess candidates as complete positions. Create an account to replace ad hoc rate browsing with a repeatable monitoring routine.
Check venue eligibility and rules for your country.
Related reading: High Funding Rates: What Holding a Position Costs.
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The funding screener checks rates across every pair on 9 exchanges and sends a push or Telegram alert when a rate crosses your threshold.
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