Collecting funding at 0.0475% every eight hours, a basis trade meets a 4.03% hour
Should the trader keep the long-spot, short-perpetual position at full size to collect funding, or cut it until the short leg's margin can absorb another hour like Tuesday's?
The market facts are real; the decision maker is illustrative.
The week and the position
In the week of 4 March 2024, BTC rose 9.26% to close 1.18% below its 52-week high, and perpetual funding averaged 0.0475% per eight hours, peaking at 0.0881%. An illustrative basis trader holds spot BTC and an equal short in the perpetual, earning that funding. On Tuesday price fell 4.03% in one hour and then climbed to a weekly high of 69,990, so the short leg's margin swung sharply even though the combined position was hedged.
Judgment
The funding income is real, but it is paid on a short leg that must survive price spikes on its own margin. Keep the trade, but size it to the margin the short needs if price rises as fast as it fell on Tuesday, and hold the spot leg where it can be moved to that margin quickly. Treat the income as carry that can disappear, not as a fixed yield.
What would change it
If funding turns negative, the trade pays instead of earns and should be closed. If the venue lets the spot holding count as margin for the short, the size limit can be relaxed.
What sets this case apart
A hedged position can still fail on margin timing; the risk is the gap between the two legs' accounts, not the price direction.