Funding, crowding and basis
Calculate actual funding cash flows, compare intervals fairly and evaluate two-leg or settlement strategies after costs and margin risk.
What you will practise
Explain a funding or basis opportunity with a complete cash-flow ledger, explicit assumptions and a scenario in which it loses.
Before you start
- Complete the lessons on margin, expectancy and normalised OI.
- Know the difference between owning spot and holding a perpetual contract.
Course outline
- 1
Calculate funding payments over your actual holding window
Build a settlement-by-settlement funding ledger from position notional, signed rates and timestamps. Separate funding from margin and trading fees.
8 min - 2
Compare hourly and eight-hour funding on equal terms
Normalise per-settlement funding to a common horizon. Distinguish simple snapshot APR from compounded projections and realised account returns.
8 min - 3
Distinguish crowded positioning from a squeeze
Use funding and open interest as context while requiring price and forced-flow evidence for a squeeze. Avoid treating extreme funding as an automatic contrarian signal.
8 min - 4
Build the full ledger for a spot–perpetual basis trade
Calculate both legs, basis change, funding and fees. Stress widening basis and separate margin accounts before calling a hedged trade low risk.
9 min - 5
Test a funding-settlement trade after all costs
Compare a funding receipt with round-trip fees, slippage and price movement. Preserve decision-time rates and settlement eligibility when testing the idea.
8 min
Educational material. Examples do not establish a profitable strategy. Trading costs, gaps and liquidation can produce losses beyond a planned stop.