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Binance Launches a Funding Rate Arbitrage Bot and Spot Copy Trading

In this post:

  • Binance has announced the launch of Funding Rate Arbitrage Bot and the full roll out of Spot Copy Trading to all eligible users.  
  • Funding Rate Arbitrage Bot is Binance’s first trading bot that automates a delta-neutral spot and futures arbitrage strategy.
  • After the successful launch of Spot Copy Trading for Lead Traders in April, Binance reports that from May 15, all eligible users will have access to the feature.

Binance has recently unveiled the Funding Rate Arbitrage Bot and made Spot Copy Trading available to all its eligible users. Binance’s Funding Rate Arbitrage Bot is a trading bot that automates a delta-neutral spot and futures arbitrage strategy.

Additionally, it eliminates the need for users to manually execute two separate spot and perpetual futures trades.

Binance delivers on community requests

At present, Binance offers over 120,000 active trading strategies on its Trading Bots Marketplace. The platform is constantly improving its range of automated trading tools. 

To that end, some of its most sought-after automated trading bots among users are Grid Trading for Spot and Futures, Rebalancing Bot, Auto-Invest, and Dollar-Cost Averaging (DCA).

The Arbitrage Bot enables traders to generate funding fees by strategically opening perpetual futures positions and hedging them through opposite positions of equal size in the spot market.

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.

Rohit Wad, Chief Technology Officer of Binance

The Arbitrage Bot has the ability to execute both spot and futures trades automatically, while eliminating the need for users to manually manage two separate trade orders on different trading interfaces. Binance’s Arbitrage Bot strategies are managed independently in users’ trading bots wallet, making it convenient for users to monitor their performance.

The Bot allows users two types of strategies

Binance’s Funding fees by design plays a crucial role in the crypto markets, ensuring that spot and perpetual futures prices remain in sync. When the funding rate is positive due to a bullish trend, long traders pay the funding fee to short traders. Conversely, when the funding rate is negative due to a bearish trend, short traders end up paying the funding fee to long traders.

The Arbitrage Bot allows users to deploy two types of strategies: 

Positive Carry: The bot purchases assets on the spot market and concurrently sells the corresponding perpetual futures contract, with the goal of enabling the user to earn funding fees from a favorable funding rate. 

Reverse Carry:  The bot strategically sells assets on the spot market while going long on perpetual contracts. The goal is for the user to benefit from collecting funding fees resulting from a negative funding rate.

As per Binance’s official announcement, the Arbitrage Bot is currently available on the Binance website. In addition, it be released on Binance App on May 30.

Copy Trading is now available to all eligible users

Along with the official announcement, Binance reports that the Spot Copy Trading feature will be fully available to all eligible users from May 15 onwards. This follows the successful introduction of the feature to Lead Traders in April.

Since signing up for Spot Copy Trading, over 70% of active Lead Traders have generated positive P&L, despite the extremely volatile market and the 11% decline in the overall crypto market capitalization in April.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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