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Swift Arbitrage

Concept​

Funding Fees and Arbitrage Bot​

The core of the arbitrage alert is based on the funding fees of futures contracts on crypto exchanges, which are settled every 8 or 4 hours. When there is a significant price difference between the spot and contract markets, the funding rate adjusts from low to high, encouraging market funds to self-adjust and providing traders with arbitrage opportunities and help market to narrow the price gap.

To facilitate this, Binance offers an Arbitrage Bot . When the alert detects a high-value arbitrage opportunity, traders can click the link in the alert notification to directly access the Binance Arbitrage Bot page for Arbitrage. The arbitrage bot hedges positions between the spot and futures contract markets, keeping the arbitrage position's profit and loss close to 0.1%, regardless of price fluctuations, while waiting for the corresponding funding rate settlement to realize profits. For more information on Binance’s Arbitrage Bot, please refer to Binance Funding Rate Arbitrage Bot and How Does It Work. The following tutorial assumes you are familiar with the basic concepts of funding rates/fees and arbitrage bots.

Flexible Arbitrage for Quick Gains​

MethodAlgo’s T.A.T.A trading system continuously monitors Binance’s market funding rates, selecting and offering arbitrage opportunities with extreme rates. Notifications are sent 10 minutes before the rate settlement, providing opportunities for quick arbitrage that can yield immediate profits, allowing you to maintain flexibility with your funds. Of course, traders can also choose to leave funds in place for multiple rounds of arbitrage—the choice is yours.

How You Can Use It​

  • Funding rate arbitrage

Interface​

  • Combo: The spot and contract pairs available for arbitrage. The alert will indicate whether it’s a Positive Arbitrage (short the contract, long the spot) or Negative Arbitrage (short the spot, long the contract) based on the funding rate direction.
  • Funding Rate: The current funding rate for the pair.
  • Settle Time: Countdown to settlement. Notifications are typically sent 10 minutes and 5 minutes before the funding rate settlement, and traders need to activate the arbitrage bot before the settlement.
  • Fees: The estimated cost of opening and closing positions with the arbitrage bot, totaling 0.3% (Spot 0.1% + Contract 0.05%) *2.
  • Est. 1x Net Profit per 10000USDT: The estimated net profit per 10,000 USDT using 1x leverage after deducting fees, based on only one settlement cycle and then withdrawing funds, displayed as a percentage or amount.
  • Launch: A quick link to the Binance Arbitrage Bot page. Click to access.

Alert Parameters​

As mentioned in the concept section, the alerts cover all Binance perpetual contracts. When the funding rate detects an eligible arbitrage combination, and if only one settlement cycle is profitable (Single funding rate settlement amount - entry and exit fees = profit), a notification will be sent.

Usage​

Funding rate arbitrage only requires entering a position before the settlement time and holding the position at the time of settlement to earn profits. You can then withdraw your funds. For example, if the RAREUSDT pair settles at 4:00 PM, and you receive the alert notification at 3:50 PM, you only need to enter the position before 3:59:59 PM. At 4:00 PM, you will receive the funding fees profit, and after confirmation, you can withdraw your funds at 4:01 PM (or keep the arb position open for the next settlement cycle):

  1. After receiving the alert notification, you usually have 10 minutes. Click the Binance bot link in the notification to quickly open the arbitrage bot page or search for the corresponding pair on your mobile device in Binance App arbitrage bot.
  2. start the arbitrage bot.
  3. Wait a few minutes. After the funding rate is settled, you can withdraw your funds. The arbitrage combination is profitable after one settlement cycle.
  4. Large price differences usually require several settlement cycles to normalize. If you don’t need the funds elsewhere, you may consider letting the bot run for multiple cycles (some pairs settle every 4 hours, others every 8 hours) to continue arbitrage. Whether you arbitrage for one cycle or multiple cycles, the fees remain fixed.

Notes​

  • Extreme rate arbitrage opportunities refer to cases where only one settlement cycle is needed to be profitable, not max-funding rate like +-2% or +-3%.
  • Opportunities that meet extreme rate conditions are not available every day.
  • Currently, the bot only supports Binance. Arbitrage alerts for other exchanges like OKX and Bybit will be introduced in 2025.
  • Positive arbitrage carries almost no risk, as traders only need to invest USDT to activate the arbitrage bot. Negative arbitrage carries short-term volatility risk because traders need to buy the corresponding spot currency before activating the bot. The price fluctuation between purchasing the spot and activating the bot, if unhedged, could result in risk.
  • New users are advised to test with small amounts and low leverage. Once familiar with the Binance Arbitrage Bot, they can invest more significant funds.
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