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29 May 2024
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Binance Unveils Funding Rate Arbitrage Bot and Expands Spot Copy Trading to All Eligible Users

Binance Unveils Funding Rate Arbitrage Bot and Expands Spot Copy Trading to All Eligible Users

Binance, the leading blockchain ecosystem behind the world’s biggest cryptocurrency exchange based on trading volume, today announced the debut of Funding Rate Arbitrage Bot and the complete rollout of Spot Copy Trading to all qualified customers.

About 120,000 active trading strategies are presently available on Binance’s Trading Bots Marketplace, and the exchange is constantly improving the range of tools it provides customers with for automated trading strategies. Grid Trading for Spot and Futures, Rebalancing Bot, Auto-Invest, and Dollar-Cost Averaging (DCA) are a few of the automated trading bots that are well-liked by consumers.

Users no longer have to manually execute two separate spot and perpetual futures trades thanks to Binance’s first trading bot, Funding Rate Arbitrage Bot, which automates a delta-neutral spot and futures arbitrage approach. By initiating a perpetual futures position and hedging it with an opposing position of the same size on the same symbol in the spot market, the Arbitrage Bot seeks to enable traders to profit on funding costs.

Once the user enters the parameters of their strategy, the Arbitrage Bot automatically executes both spot and futures trades simultaneously, saving them the trouble of managing two trade orders on separate trading interfaces. This is the main advantage of the Arbitrage Bot over manually implementing an arbitrage strategy. It is also simple for users to keep an eye on the success of the Arbitrage Bot strategies since they are individually handled in their trading bot wallet.

The purpose of funding fees, which are exclusive to cryptocurrency markets, is to maintain price alignment between spot and perpetual futures. When there is a bullish trend and the funding rate is positive, long traders pay the funding fee to short traders; conversely, when there is a bearish trend and the funding rate is negative, short traders shell out the funding fee to long traders.

Users of the Arbitrage Bot may implement two different kinds of strategies:

  • Positive Carry: In order to provide the customer with funding fees from a positive funding rate, the bot purchases assets on the spot market and shorts the matching perpetual futures contract.
  • Reverse Carry: In order to get the user to profit from a negative funding rate, the bot sells assets on the spot market and invests in perpetual contracts.

The Arbitrage Bot may be found on the Binance website, and on May 30 it will be made accessible on the Binance App.

Rohit Wad, Chief Technology Officer of Binance, shared:

“We believe in giving users more choices and we constantly review community feedback to understand what users want. Our Funding Rate Arbitrage Bot is a simple and effective tool to automate for users who already manually deploy arbitrage strategies. Its user-friendly interface means more users can try new strategies. We continue to build trading tools for our users and we are pleased that the community’s reception to our Spot Copy Trading launch has been very positive with over 700 Lead Traders registrations so far.”

Complete Copy Trading Accessible to All Eligible Users

In response to customer demand, Binance launched Spot Copy Trading, which it made available to Lead Traders for the first time in late April.

Over 70% of active Lead Traders have reported positive P&L since signing up for Spot Copy Trading, despite a very tumultuous market that saw an 11% decline in the total size of the cryptocurrency market in April.

Spot Copy Trading was successfully introduced to Lead Traders in April, and starting on May 15, all eligible users will be able to follow Lead Traders and copy their portfolios.

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