BitMEX Alpha: Spot and futures arbitrage using futures | BitMEX Blog

Note: The content described below is not considered financial advice and only provides learning advice to users on trading strategies. We encourage users to do as much research as possible before executing any transaction. The following is not intended to deliver guaranteed returns, and BitMEX will not be held liable if a trade does not perform as expected.

A few days ago, Bitcoin finally hit an all-time high of 69,409.5 on the XBTUSD contract. At BitMEX Alpha we would like to see more all-time highs, but we have other opportunities as well.

With the recent return of traders, inflows into Bitcoin ETFs have become active,Expectations for an interest rate cut are growingAmid the cryptocurrency market craze, futures contracts are traded at a significant premium compared to spot market transactions.

This means that our futures provide good basis (arbitrage) trading opportunities. Operation is simple. Realize basis by buying spot, selling futures and holding this combination until the contract expires!

We have put together a list of futures contracts that can yield underlying returns on BitMEX. The focus this week is on the ETHUSDTH24 contract, with its annualized percentage (APY) reaching 80% this week as ETH continues to hit new yearly highs against ETF expectations.

Are you already actively trading on BitMEX and want more capital to execute these profitable basic trades? When you sign up for Margin+, we’ll give you additional Bitcoin or Tether so you can make more transactions.hereLearn more about Margin+.

List of futures contracts providing returns on a consolidated basis

The following list shows BitMEX’s futures contracts and the basis APY (%)* you can secure.

.*Note: Data were obtained at the time of writing.

How to run?

1. Buy (go long) spot tokens on the spot market or through the conversion function.
2. Sell ​​futures contracts for the token in the futures market (Go Short).
3. Futures contracts are held until the contract expires for basis to be realized.
4. When the contract expires, we sell the spot tokens.

you can refer toIn this article “1. Futures Trading and Spot Trading” A step-by-step guide to understanding basis trading (futures contracts and spot).

What are the potential benefits?

Any captured base will be to your benefit. To realize full returns, you must hold the portfolio until the contract expires.

Considerations

• These are the costs of entering and exiting two trades, including trading fees and slippage.
• There is execution risk when trading spot and futures contracts simultaneously, especially during periods of high market volatility.
• Considering that the above contracts can be traded with up to 100x leverage, there is a risk of liquidation. If the market price is higher than the liquidation price, your position may be liquidated, exposing you to the risks of an unhedged spot position. If you choose to trade with high leverage, you must pay close attention to market conditions and replenish your wallet in a timely manner to meet margin requirements. Alternatively, you can choose to use lower leverage to reduce liquidation risk.

Dual currency spot contract

• USDT is required to purchase spot. Margin for perpetual contracts requires additional XBT (Bitcoin).
• Please note that dual currency futures contracts are margined and settled in XBT (Bitcoin), so you are still exposed to XBT/USD price risk when trading dual currency futures contracts. You may consider selling XBTUSD or XBTUSDT contracts to hedge your XBT price risk.

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