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What is Delta Neutral Trading?

Delta neutral trading is a strategy where you hold offsetting positions to eliminate directional price risk. By going long on one exchange and short on another, your net exposure to price movements is zero, while you profit from funding rate differences.

Understanding Funding Rates

Funding rates are periodic payments between long and short traders in perpetual contracts. When the rate is positive, longs pay shorts. When negative, shorts pay longs. These payments occur every 8 hours on most exchanges.

Arbitrage Opportunities

Arbitrage involves exploiting price differences for the same asset across different markets. In crypto, this can be between exchanges (CEX-CEX), between spot and futures (cash-and-carry), or between funding rates (delta neutral).

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