The basis trade is one of the most popular market-neutral strategies in crypto: go long spot, short perpetual futures, and collect the funding rate. This puzzle walks you through building a real basis trade one decision at a time.
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Step 1 of 4
How it works
- Set up the legs — choose the right long/short combination for a positive funding rate.
- Choose position size — size the trade to hit a daily yield target.
- Pick safe leverage — basis trades are carry trades; low leverage is the point.
- Calculate the annual yield — convert the 8-hour funding rate into an APY.
Why this matters
Basis trading captures the difference between spot and perpetual futures prices:
- Positive funding means longs pay shorts. You go long spot and short the perp to collect it.
- Delta neutrality means the Bitcoin price barely matters — you are harvesting yield, not betting on direction.
- Low leverage is key. The spread is small; a liquidation can wipe out weeks of yield.
Tips
- Funding rates change every interval. The APY is the theoretical yield if the current rate stayed flat.
- Don’t forget fees, slippage, and the cost of borrowing to short the perp.
- Compare the funding yield across exchanges to find the best opportunities.
This tool is for education and entertainment only — not financial advice.