Funding Rate Arbitrage Calculator

Funding rate arbitrage exploits the periodic payments between long and short perpetual futures holders. When the perpetual price trades above the spot price, the funding rate is positive — meaning longs pay shorts. By shorting the perp and simultaneously buying spot, you create a market-neutral position that earns the funding rate as yield.

On Hyperliquid, funding rates are calculated and paid every hour. A funding rate of 0.003%/hr translates to roughly 0.072%/day or 26.3% APR. During periods of high market bullishness, funding rates can spike significantly higher, creating attractive arbitrage opportunities.

The main cost is the trading fee to enter and exit both the spot and perp positions. At 0.05% taker per side on both legs, the round-trip cost is approximately 0.2% of position size. This fee must be recovered through funding payments before the strategy becomes profitable.

A delta-neutral position has zero net exposure to price movement. If the asset goes up $100, your long spot gains $100 and your short perp loses $100 — the net effect is zero. Your profit comes solely from the funding rate payments.

To execute this on Hyperliquid: (1) Buy the asset on spot (e.g., buy ETH on HyperEVM or a spot market), (2) Open a short perpetual position of the same size on Hyperliquid perps, (3) Collect hourly funding payments as long as the rate remains positive, (4) Close both positions when funding rates become unfavorable.

The key risk is funding rate reversal. If the rate flips negative, you start paying instead of earning. Monitor rates closely and set alerts for significant changes. The live funding rates page shows current rates across all Hyperliquid markets.