How to Calculate Funding Arbitrage Profit

The profit from funding arbitrage isn't just the funding received. You have to subtract fees and account for the spread. Here is the full calculation, with an example you can redo in your own spreadsheet.

The formula

In simple terms, the net result is: funding received − funding paid − entry and exit fees ± spread effect. Each term can be positive or negative.

• Funding received and paid: position value × each leg's rate × number of payments.
• Fees: position value × fee (maker or taker) × 2 (entry and exit) × 2 legs.
• Spread: the difference between the entry and exit prices on both legs.

Step-by-step example

A $1,000 position on each leg. Exchange A (short) pays +0.05% per payment. Exchange B (long) charges 0.01% per payment. You stay for 3 payments.

1. Funding received: 1,000 × 0.05% × 3 = $1.50.
2. Funding paid: 1,000 × 0.01% × 3 = $0.30.
3. Net funding: 1.50 − 0.30 = $1.20.
4. Fees (taker 0.06%, entry and exit, two legs): 1,000 × 0.06% × 4 = $2.40.
5. Result before spread: 1.20 − 2.40 = −$1.20.

The practical conclusion: the more consecutive payments you receive, the more the fees get diluted. That's why the payment history matters so much when choosing a coin.

The effect of spread

If you pay a −0.05% spread on entry and receive +0.03% on exit, the net effect is −0.02%, or $0.20 on $1,000. It can tip the math one way or the other. See what spread is.

How to automate the math

Doing this by hand for every coin is laborious. The Multi Arbitrage cards show the funding per leg, the fees, the entry and exit spread and the potential profit already calculated. The bot only enters when the expected net profit exceeds the minimum you set. Learn more in how the bot works.

Common mistakes in the calculation

• Forgetting to add the fees of both legs, on entry and on exit.
• Using the predicted funding as if it were the amount paid, without checking.
• Ignoring that funding can be on different intervals on the two exchanges.
• Comparing percentages on different bases, such as per payment and per day.
• Not accounting for the exit spread, which only shows up when you close.

Spreadsheet template

Create one row per payment and these columns: position value, leg A funding, leg B funding, total received, total paid and net. At the end, subtract the fees and add the spread effect. Compare the result with what the exchange records in its statement. If they match, your calculation is right.

Frequently asked questions

Read also

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Multi Arbitrage TeamInformational content about crypto arbitrage and futures. Not investment advice.