You mention data is based on the last 6 months – which is when we have had a bull market and thus more long positions (and higher funding rates to profit on). What would happen in bear / crashing market with a lot of short positions? Please explain the worst case scenario.Also I prefer to start the bot and not look at it for a few weeks – is that the right strategy or do I have to monitor daily ?
Answer
Spot-Futures Arbitrage Bot is hedging bot . Since you open position in spot market meanwhile also short the same size in the futures market, price doesnt affect your earning. Increasing price will make your spot position profit but your futures position loss, meanwhile decreasing price will make your spot position loss but your futures position profit. This 2 condition will cancel each other so it doesnt care the volatility of the market. That’s why it is extremely low risk. The risk mostly comes from the funding fee, which is only related to the spot market and futures market difference price in average. It has highest number of +-0.75% with average of 0.03-0.01%
