Subscribe to dianniamh95
Subscribe to dianniamh95
Share Dialog
Share Dialog


<100 subscribers
<100 subscribers
Funding on NFTperp refers to the mechanism used to ensure that the perpetual futures contract prices are in line with the spot prices of the underlying NFTs. Perpetual futures contracts differ from traditional futures contracts as they do not have an expiration date. To keep the contract prices anchored to the spot market, NFTperp employs a funding rate system. This funding rate is a periodic payment exchanged between long and short position holders. Depending on the difference between the contract price and the spot price, one side will pay the other, incentivizing convergence between the two prices.
The funding rate is calculated based on the difference between the perpetual contract price and the spot price of the underlying NFT. If the perpetual contract is trading at a premium (higher than the spot price), long positions pay a funding fee to short positions. Conversely, if the contract is trading at a discount (lower than the spot price), short positions pay a funding fee to long positions. This mechanism helps maintain price stability and aligns the contract prices with the actual market value of the NFTs.
In essence, the funding rate system on NFTperp is crucial for the proper functioning of perpetual futures markets, ensuring that the prices of these contracts remain close to the real-time value of the underlying NFTs. By doing so, it provides traders with a reliable and consistent trading experience, mirroring the actual movements of the NFT market.
Both Remilio and Milady NFTs have demonstrated a high degree of correlation, with only a 0.8% change in price between them over the past 7 days. This close correlation presents an interesting opportunity for traders to capitalize on the funding rate differences on NFTperp.
The primary purpose of this trade is to exploit the significant funding rate disparity between the two NFTs. By executing a strategic position, traders can potentially reap substantial rewards.
2x Long Remilio: This position yields a +414% APR via funding at 2x leverage.
2x Short Milady: This position yields a +694% APR via funding at 2x leverage.
Combining these positions results in an overall position earning +554% APR in $ETH via funding at the current rates. An added benefit is that funding rates on NFTperp tend to be negatively correlated with price, offering a reasonable chance of profiting from price changes.
In the scenario where your position becomes profitable due to changes in price, it would be prudent to lock in your profits and exit the trade. The rationale behind this is that funding rates typically follow price movements, meaning the attractive +554% APR via funding may soon change.
This pair trade strategy on NFTperp not only leverages the funding rate differences but also allows for potential gains from price fluctuations, making it a compelling opportunity for savvy traders.
Funding on NFTperp refers to the mechanism used to ensure that the perpetual futures contract prices are in line with the spot prices of the underlying NFTs. Perpetual futures contracts differ from traditional futures contracts as they do not have an expiration date. To keep the contract prices anchored to the spot market, NFTperp employs a funding rate system. This funding rate is a periodic payment exchanged between long and short position holders. Depending on the difference between the contract price and the spot price, one side will pay the other, incentivizing convergence between the two prices.
The funding rate is calculated based on the difference between the perpetual contract price and the spot price of the underlying NFT. If the perpetual contract is trading at a premium (higher than the spot price), long positions pay a funding fee to short positions. Conversely, if the contract is trading at a discount (lower than the spot price), short positions pay a funding fee to long positions. This mechanism helps maintain price stability and aligns the contract prices with the actual market value of the NFTs.
In essence, the funding rate system on NFTperp is crucial for the proper functioning of perpetual futures markets, ensuring that the prices of these contracts remain close to the real-time value of the underlying NFTs. By doing so, it provides traders with a reliable and consistent trading experience, mirroring the actual movements of the NFT market.
Both Remilio and Milady NFTs have demonstrated a high degree of correlation, with only a 0.8% change in price between them over the past 7 days. This close correlation presents an interesting opportunity for traders to capitalize on the funding rate differences on NFTperp.
The primary purpose of this trade is to exploit the significant funding rate disparity between the two NFTs. By executing a strategic position, traders can potentially reap substantial rewards.
2x Long Remilio: This position yields a +414% APR via funding at 2x leverage.
2x Short Milady: This position yields a +694% APR via funding at 2x leverage.
Combining these positions results in an overall position earning +554% APR in $ETH via funding at the current rates. An added benefit is that funding rates on NFTperp tend to be negatively correlated with price, offering a reasonable chance of profiting from price changes.
In the scenario where your position becomes profitable due to changes in price, it would be prudent to lock in your profits and exit the trade. The rationale behind this is that funding rates typically follow price movements, meaning the attractive +554% APR via funding may soon change.
This pair trade strategy on NFTperp not only leverages the funding rate differences but also allows for potential gains from price fluctuations, making it a compelling opportunity for savvy traders.
No activity yet