When you see a product trading lower on one exchange than others, and are wondering "Who would short this.
15 Mar 2023, 00:34
When you see a product trading lower on one exchange than others, and are wondering "Who would short this?", check out the funding rate.
You may have a counterparty arbing the funding rate, in which case -- look out for moves when the + funding period (and rate) expires!
Alice needs:
- a lot of collateral to make this trade worth it
- to be very cautious about the funding rate going down or reversing
- confidence in the performance of the exchange(s) she is using.