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What are the key factors to consider when implementing a successful perpetual futures arbitrage strategy?

avatarAleynaNov 27, 2021 · 3 years ago1 answers

What are the main factors that one should take into account when trying to implement a successful arbitrage strategy in perpetual futures trading?

What are the key factors to consider when implementing a successful perpetual futures arbitrage strategy?

1 answers

  • avatarNov 27, 2021 · 3 years ago
    When implementing a successful perpetual futures arbitrage strategy, it is important to consider the funding rates on different exchanges. Funding rates can have a significant impact on the profitability of arbitrage trades. By carefully analyzing the funding rates and their historical trends, you can identify exchanges that offer favorable rates for long or short positions. This can give you an edge in executing profitable arbitrage trades. Additionally, it is important to consider the trading volume and liquidity on each exchange. Higher trading volume and liquidity can result in tighter bid-ask spreads, making it easier to execute arbitrage trades. Finally, it is crucial to stay updated with the latest news and developments in the cryptocurrency market. Market news and events can have a significant impact on prices and create arbitrage opportunities. By staying informed, you can identify and capitalize on these opportunities.