Spread mechanics
Delta-neutral positioning
Every Spreadr trade holds offsetting positions of equal size in the same market on two different venues: long N on one venue, short N on the other. The directional (delta) exposure nets to zero, so the position's value is insensitive to the market's absolute price. What remains is the relative payoff between the two venues — the funding differential, the basis, or both. Spreadr supports two ways to monetize that relative payoff.
Net-funding arbitrage
The goal is to hold the position such that both legs collect funding, or such that the funding collected on one leg exceeds the funding paid on the other. Combining the funding cash flow across both legs, the net funding per settlement period is:
where f_short and f_long are the funding rates on the venues where the position is short and long, respectively. The expression is maximized by shorting the higher-funding venue and going long the lower-funding venue — placing each leg on the side of the market that is being paid.
A trader holds a delta-neutral SOL position of $50,000 per leg.
- Lighter funding: −0.008% per hour → longs are paid. Take the long leg here.
- Hyperliquid funding: +0.011% per hour → shorts are paid. Take the short leg here.
Net carry per hour = $50,000 × (0.011% − (−0.008%)) = $50,000 × 0.019% ≈ $9.50.
Over a day that is ≈ $228; expressed against the one-sided notional, the per-hour rate annualizes to an ≈ 166% APR-equivalent while the spread persists — before trading fees, and before the rates move.
Two caveats make this an ongoing execution problem rather than a one-time trade. First, venues settle funding on different cadences (e.g. hourly vs. every eight hours); Spreadr normalizes rates to a common APR-equivalent so opportunities are comparable. Second, funding rates are not static — they re-fix every period and can invert, at which point the position should be closed or rotated. Spreadr's terminal continuously ranks live pairs by APR-equivalent yield and surfaces a stability score to favor spreads likely to persist.
Basis trades
When the same perpetual's mark price diverges across two venues beyond a chosen threshold, Spreadr opens a delta-neutral position that is short the expensive venue and long the cheap one, then closes it as the prices converge. The payoff per unit of size is the change in basis between entry and exit:
where b = P_A − P_B is the gross basis and q is the position size. Because the position is delta-neutral, absolute price moves during the hold do not affect the payoff; only the convergence of the two prices does.
ETH trades at $3,420.0 on venue A and $3,414.0 on venue B — a gross basis of $6.0 (≈ 17.5 bps). The trader's entry condition is "basis ≥ $5.0". Spreadr shorts 10 ETH on A and longs 10 ETH on B.
The basis converges to $0.5. Closing both legs captures ($6.0 − $0.5) × 10 = $55, minus fees, with no directional exposure at any point. (While the position is open it also accrues each venue's funding, which nets into the result.)
Basis trades are typically shorter-lived than funding trades — they open on a dislocation and close on reversion, over minutes to hours.
Spread definition and conditions
A user defines a spread with a small, explicit parameter set:
| Parameter | Meaning |
|---|---|
| Market | The canonical symbol to trade (e.g. SOL), resolved to each venue's local symbol. |
| Venue pair | The two exchanges to trade between. |
| Spread condition | A comparison against the gross spread — the raw price (or funding) difference — using one of the operators >=, >, <=, <, = (default >=). Execution only proceeds while the condition holds. |
| Target size | Total size to accumulate across the trade. |
| Risk limits | Per-exchange leverage caps and a slippage limit for hedges (see Risk framework). |
Spreadr computes the spread as a gross (raw) difference rather than a percentage, so the condition semantics are unambiguous across markets of different price scales.
Opportunity ranking
The set of tradable (market, venue-pair) tuples updates continuously. Across five venues there are ten unordered venue pairs, and the top markets by volume are listed on three or more venues simultaneously, yielding hundreds of live candidate spreads at any time. Spreadr's terminal ranks them by APR-equivalent yield and annotates each with a stability score, so a user selects from a live, sorted opportunity set rather than hunting for one by hand.