Projected APY
--
Annual percentage yield on your total capital
Annual Passive Income
--
Funding collected over 365 days at this rate
Projection assumes the current funding rate holds steady. Live rates change every interval.
⚖ Enter Your Position Inputs
$
The full amount you will deploy. It is split evenly across the spot buy and the short.
%
The funding rate paid each interval. A positive rate pays the short side that you hold.
How often the exchange settles funding. This sets the number of daily payouts.
📝 How to Trade It: Your Exact Allocations
Step 1
Buy Spot (Hold in Wallet)
--
Buy this dollar amount of the asset on the spot market and hold it. This is the long leg of your hedge.
Step 2
Open 1x Short (Perpetual Futures)
--
Open an equal sized short at 1x leverage on the perpetual contract. This collects the funding rate with no liquidation risk.
🧾 The Income Tape: Funding Collected
Per Payout --
Per Day --
Per Month --
Per Year --
Short Position Size
--
The half that earns funding
Daily Payouts
--
Settlements per 24 hours
Fee Per Interval
--
Funding at each settlement
📖 Key Terms Explained
Funding Rate
A small periodic payment swapped between long and short traders on a perpetual futures contract. It keeps the perpetual price tethered to spot. When positive, the short side you hold gets paid.
Delta Neutral
A position built so price moves cancel out. By holding equal sized spot and short legs, your net value stays roughly flat whether the asset rises or falls, leaving the funding rate as your profit.
Perpetual Futures
A futures contract with no expiry date. Because it never settles to delivery, exchanges use the funding rate mechanism to keep its price aligned with the underlying spot market.
Spot Market
The market where you buy and own the actual asset for immediate delivery, holding it in your wallet. In this strategy the spot purchase is the long leg that offsets your short.
APY (Annual Percentage Yield)
The yearly return on your capital expressed as a percentage. Here it is the projected annual funding income divided by your total capital, assuming the current rate holds.
Cash and Carry Arbitrage
A market neutral trade where you buy an asset in the spot market and sell a derivative against it to capture a pricing difference. Collecting perpetual funding is a popular crypto version of this classic strategy.
1x Leverage
Sizing a futures position so it equals the cash backing it, with no borrowing multiplier. At 1x there is effectively no liquidation price the market can realistically reach, which is what keeps the short leg safe.
Funding Interval
How often an exchange settles the funding payment. The standard is every 8 hours, which is 3 payouts a day, though some venues use 4 hour or 1 hour intervals for more frequent settlement.
Short Position
A bet that profits when price falls. In a delta neutral funding trade the short is not a directional bet, it is simply the leg that collects the funding rate while your spot holding offsets the price risk.
Liquidation
The forced closure of a leveraged position when losses exhaust its margin. Using 1x leverage and backing the short with a full half of your capital is what keeps liquidation off the table.

The Complete Guide to the Delta Neutral Funding Rate Strategy

The delta neutral funding strategy, sometimes called a cash and carry trade or basis trade, is one of the most popular ways to earn passive yield in crypto without betting on price direction. The idea is simple: you buy an asset on the spot market, short the same dollar amount on perpetual futures, and collect the funding rate that long traders pay to shorts. This guide explains the math behind the calculator above, how to read its results, and the real risks involved.

How to Use This Funding Rate Calculator

Enter the Total Capital you plan to deploy, the Current Funding Rate quoted by your exchange as a percentage, and the Funding Interval the exchange uses to settle payments. Everything updates instantly as you type, with no submit button to press. The calculator splits your capital in half, sizes the spot buy and the short equally, and projects your funding income per payout, per day, per month, and per year. The two star metrics at the top are your Projected APY and your Annual Passive Income.

The Delta Neutral Engine, Step by Step

First the engine splits your capital evenly: the Spot Allocation is your total capital divided by two, and the Short Position Size is the other half. Matching these two dollar amounts is what cancels out price risk and keeps the short at 1x leverage. Next it works out the fee earned at each settlement, which is the short position size multiplied by the funding rate as a decimal. It then converts the interval into daily payouts: an 8 hour interval is 3 payouts a day, a 4 hour interval is 6, and a 1 hour interval is 24. Daily income is the fee per interval times the daily payouts, annual income is the daily figure times 365, and the APY is annual income divided by total capital, shown as a percentage.

A Worked Example

Suppose you deploy 1,000 dollars at a funding rate of 0.01 percent on a standard 8 hour interval. Your capital splits into a 500 dollar spot buy and a 500 dollar short. The fee per interval is 500 times 0.0001, which is 5 cents. With 3 payouts a day that is 15 cents of daily income, about 4.56 dollars a month, and roughly 54.75 dollars a year. Dividing the annual income by your 1,000 dollars of capital gives a projected APY of about 5.48 percent, all collected without taking a directional view on the market.

Why the Fifty Fifty Split Keeps You Safe

The even split is the heart of the strategy. Because the spot and short legs are the same dollar size, a rise in price gains on the spot side exactly what it loses on the short, and a fall does the reverse. Your net worth barely moves, so you are market neutral. Funding the short with a full half of your capital also keeps it at 1x leverage, meaning there is no realistic liquidation price. Traders who chase higher headline yields by shorting with high leverage give up this safety, because a sharp price spike can liquidate the short and break the hedge entirely.

The Single Biggest Risk to Watch

The projection assumes the funding rate stays positive and steady, but in reality it changes every interval and can turn negative. When the rate is negative, the short side has to pay funding instead of receiving it, so your passive income reverses into a recurring cost. This is the main way the strategy loses money. You should monitor the live funding rate, factor in trading fees and spreads on both legs, and be prepared to unwind the position if the rate stays negative for an extended stretch.

Frequently Asked Questions

A funding rate is a small periodic payment exchanged between traders who hold perpetual futures contracts. Unlike traditional futures, a perpetual contract never expires, so exchanges use the funding rate to keep the contract price tethered to the real spot price of the underlying asset. When the perpetual trades above spot, the funding rate is positive and long traders pay short traders. When it trades below spot, the rate is negative and short traders pay longs. The rate is usually quoted as a percentage charged every 8 hours, though some exchanges settle every 1 or 4 hours. In a delta neutral strategy you hold the short side specifically to collect this funding payment, which is why a positive funding rate becomes a source of passive income.
Delta is a measure of how much your position value changes when the price of the asset moves. A delta neutral position is built so those price movements cancel out, leaving your total portfolio value roughly flat whether the asset goes up or down. In this strategy you buy an asset on the spot market and simultaneously open an equal sized short on the perpetual futures market. If the price rises, your spot holding gains exactly what your short loses, and if the price falls, your short gains exactly what your spot loses. Because the two legs offset, you are not betting on direction. You are simply positioned to harvest the funding rate while the market noise washes out.
Splitting your capital evenly is what makes the strategy both market neutral and safe from liquidation. Half of your money buys the asset on the spot market, and the other half backs an equal sized short position at 1x leverage on perpetual futures. Matching the dollar size of both legs is what cancels out price risk, so a move in either direction does not change your net worth. Funding the short with the full other half of your capital keeps the leverage at 1x, which means there is effectively no liquidation price the market can realistically reach. If you instead used high leverage to short with only a sliver of capital, a sharp price rise could liquidate the short and break the hedge. The fifty fifty split trades away some yield for the security of never being forced out of your position.
Yes, this strategy is lower risk than directional trading but it is not risk free. The main risk is that the funding rate turns negative. When that happens the short side has to pay the funding fee instead of receiving it, so your passive income reverses into a recurring cost that slowly drains your capital. Funding rates change every interval and can flip negative during bearish stretches, so the projected APY shown here assumes the current rate holds, which it will not do forever. Other real costs include trading fees and spreads when you open and close both legs, the risk that one exchange has technical or solvency problems, and the small tracking differences that can appear between the spot price and the perpetual price. You should monitor the live funding rate and be ready to unwind both legs if it stays negative.
No. Every calculation runs entirely inside your own browser using client-side JavaScript. The capital amount, funding rate, and interval you enter are never transmitted, saved, or shared with any server. Nothing you type leaves your device, so your trading plan stays completely private.