A 27.16% week paid just 0.0119% funding while the short leg faced a 4.47% hour
Should the basis trader keep the equal-sized perpetual short through a week this extreme, or cut it so the short's margin survives another move like Monday's 4.47% hour?
The market facts are real; the decision maker is illustrative.
The week and the position
In the week of 13 March 2023, BTC rose 27.16% from 21,998.05 to 27,972.87, a return at the 100th percentile of 265 weeks, with a 30.15% range and a largest one-hour move of 4.47% on Monday. Funding averaged 0.0119% per eight hours, peaking at 0.0298%. An illustrative basis trader holds spot BTC and an equal short in the perpetual, collecting that funding. The week's low came before its high, and the close sat in the upper third of the range, 41.69% below the 52-week high.
Judgment
The carry is thin against the margin the short leg needs: 0.0119% per eight hours buys little buffer when one hour can move 4.47% and the week ranked first in 265. Keep the structure, but size the short so its margin holds if price repeats Monday's hour near the weekly high of 28,390.10, and keep the spot leg liquid enough to post that margin. Accept lower funding income in exchange for not being forced out mid-move.
What would change it
If funding stays near its 0.0298% maximum for several weeks while hourly ranges shrink below 4.47%, the short can be scaled back up. If price closes back near the 21,998.05 open, the margin case for the smaller size weakens.
What sets this case apart
The hedge offsets price direction but not margin timing; a 100th-percentile up week over 265 weeks of history can strain a short that is supposed to be risk-neutral.