Direct answer
Spot long plus perpetual short earns the funding the short receives: at +0.01%, 10,000 USDT collects 3 USDT a day, but the four trades to open and close cost 30 USDT, so it takes 10 days to break even and 30 days to net 60 USDT. The higher the short's leverage, the closer the hedge is to breaking: at 2x price must rise 49.18% to liquidate the short, at 10x only 9.40%.
The structure: two legs, one income
Buy 10,000 USDT of spot and open a 10,000 USDT perpetual short. When price rises the spot gains and the short loses, and the reverse on a fall, so price P&L roughly cancels. What remains is the funding the short receives each interval — as long as the rate stays positive.
At +0.01% a 10,000 USDT short receives 1 USDT per interval, 3 USDT a day across three settlements. That is the entire income of the structure; everything else is a cost or a risk.
Four fees set the break-even
Opening means buying spot and selling the perpetual; closing means selling spot and buying the perpetual back — four trades. At example rates of 0.10% on spot and 0.05% taker on the perpetual, the round trip is 30 USDT.
Break-even days = round-trip fees ÷ daily funding income. At +0.01% it takes 10 days to break even; at +0.005%, 20. Close before that and the trade loses money after fees.
Break-even days at a glance
The 30 USDT round trip has to be earned back from daily funding. The lower the rate, the longer that takes; hold for less than the break-even period and the trade loses after fees.
The table assumes the rate stays fixed for the whole period, when in fact it is reset every interval. At +0.03% the trade breaks even in 3.3 days, but rates that high are usually the least persistent.
| Rate per interval | Daily funding income | Break-even days | Net after 30 days |
|---|---|---|---|
| +0.005% | 1.50 USDT | 20.0 days | 15.00 USDT |
| +0.010% | 3.00 USDT | 10.0 days | 60.00 USDT |
| +0.030% | 9.00 USDT | 3.3 days | 240.00 USDT |
Short-leg leverage and the breaking point
The spot leg is paid for in full, 10,000 USDT; the short needs only margin. At 2× the structure ties up 15,000 USDT, and 30 days at +0.01% nets 60 USDT — 0.40% of that capital.
Raising capital efficiency means raising the short's leverage, which pulls the breaking point closer. The table shows the simplified liquidation level of the same 0.2 BTC short at each leverage; a rise beyond it liquidates the short first and leaves an unhedged spot position.
| Short leverage | Short margin | Simplified liquidation | Rise that breaks the hedge |
|---|---|---|---|
| 2× | 5,000.00 USDT | 74,589.76 USDT | 49.18% |
| 3× | 3,333.33 USDT | 66,302.01 USDT | 32.60% |
| 5× | 2,000.00 USDT | 59,671.81 USDT | 19.34% |
| 10× | 1,000.00 USDT | 54,699.15 USDT | 9.40% |
The hedge can break halfway
Spot and the short sit in different accounts, and the short's margin does not grow when the spot gains. In a sharp rally the short can be liquidated first, and the spot's paper profit cannot rescue it: the hedge breaks exactly when it is needed.
A 10× short reaches its simplified liquidation level after roughly a 9.40% rise; a 2× short after about 49.18%. The higher the leverage, the less margin is tied up — and the closer the break.
What to settle before you start
Confirm both legs are available to you where you live, that funds can move between spot and futures in time, and what you will do when the rate turns negative. It can stay positive for many intervals or flip within one.
Then account for the basis: the gap between perpetual and spot at entry and exit is P&L. The higher the perpetual's premium when you enter, the more a return to parity favours the short, and vice versa.
Official sources and calculation boundary
Payment direction follows OKX's funding FAQ, the short's liquidation condition its liquidation documentation, and the futures fee structure Binance's fee schedule. The 0.10% spot rate is an example value; your actual rates, the transfer rules between the two accounts and your regional eligibility all need checking while signed in.
- OKX: perpetual futures funding fee FAQ
- OKX: futures liquidation price and conditions
- Binance: futures fee schedule
Next checks in this series
Frequently asked questions
Is funding-rate arbitrage risk-free?
No. Price risk is offset, but a negative rate, liquidation of the short, basis moves, transfer delays between accounts and exchange risk all remain.
Why not use more leverage for better capital efficiency?
The higher the short's leverage, the earlier a rally liquidates it. Once a leg breaks, what is left is an unhedged spot long, and the structure is no longer an arbitrage.
What should I do when the rate turns negative?
A negative rate means the short starts paying, so the income source has reversed. Whether to exit at once depends on the remaining fees, how long you expect the negative rate to last and whether the basis works against you on exit; there is no answer that fits every case.
Can both legs live in the futures account?
Two opposite futures positions are possible, but that structure collects nothing — the payments cancel. Collecting funding needs one leg that pays no funding, and spot is the usual choice.