When the price of an asset in the spot market differs from its price in a futures contract, traders can take advantage of these differences by placing trades in both markets at the same time. This strategy is called spread arbitrage. Another opportunity arises from funding rate arbitrage, where you buy an asset in the spot market and sell it in a perpetual contract to earn funding rate payments.
What's Spread arbitrage?
Checklist
- How do I set up Arbitrage trading bot?
- Select Arbitrage order from the list of trading bot strategies
- Select Arbitrage from the pop-up menu at Trading bots > Arbitrage bots
- Then, select the trading pairs at the top to select the arbitrage bot you want to use
- Select the trading pairs of your preference
- To profit from perpetual swap funding rate payments, select Funding rates. To arbitrage the spread between two instruments, select Spreads
- Determine your strategy and select either Funding rates or Spreads
- Select Spreads: choose between USDT-margined or USDC-margined, and select your strategy
- Set Margin mode: choose between Cross and Isolated margin modes
- Set your range of queuing and surpassed parameters accordingly
- Select Funding rates: Choose between Crypto-margined or USDT-margined to settle trades in your preferred currency. Then, select the portfolio to trade
- Select your preferred margin under the Funding rates section
Notes
Spread arbitrage involves trading the price difference between two markets, such as spot and futures, or between two futures contracts. Here’s a simplified example:
You buy 1 BTC in the spot market at $50,000 and sell a futures contract at $50,100.
No matter how the price moves at settlement, you profit from the price difference.
To set up spread arbitrage:
Details follow the official OKX help article; this page is a learning checklist, not an official mirror.
