Spread Trading 101
A "spread trade" buys one perpetual and sells the same notional of an equivalent perpetual on a different exchange. The position is delta-neutral — you don't care which direction the underlying moves. Your P&L comes from the price differential between the two legs or the funding-rate differential, depending on the trade type.
The two trade families Spreadr executes
Net-funding arbitrage
Perpetual exchanges charge or pay funding every 1-8 hours to keep the perp price tracking spot. The rate varies per exchange and per market.
If Hyperliquid pays longs 0.01% per 8h on SOL-USD while Extended charges shorts 0.04% per 8h on the same market, going long HL + short Extended captures the +0.05% / 8h spread (≈18% APR) with no directional exposure.
The terminal's Funding Rates tab ranks all currently-available net-funding opportunities across every venue pair. Bigger gaps = bigger APR, but also faster decay (other traders are racing for the same opportunity).
Basis trades
Sometimes the same perpetual quotes at a different mid-price across two venues — a basis. Spreadr enters the cheaper side and exits the richer side simultaneously to lock in the price gap, then unwinds when the basis collapses.
Basis trades are typically shorter-duration than funding arb; opportunities appear during volatility spikes and close in minutes-to-hours.
Why latency matters
Both opportunities are eroded by traders racing to capture them. The mathematical edge sits in the spread; the executable edge sits in your ability to fill both legs before someone else closes the gap.
Spreadr's latency advantages:
- Co-located in Tokyo for low-latency access to most exchange endpoints.
- Direct order placement over the lowest-latency transport each venue supports.
- Per-trade isolation — each spread gets its own dedicated connections and rate-limit budget, so your trades never queue behind anyone else's (or each other).
Risk model
A spread trade is delta-neutral by construction, but it isn't risk-free:
| Risk | What Spreadr does about it |
|---|---|
| Leg 1 fills, leg 2 doesn't | The hedge fires the instant a fill arrives. If anything interrupts it — network blip, venue outage, crash — recovery reconciles against your live exchange positions and sends a catch-up hedge. |
| Exchange disconnects mid-trade | Open orders are canceled and the trade pauses; it resumes automatically when the feed recovers. An outage longer than ~5 minutes fails the trade explicitly rather than leaving it stuck. |
| Funding flips direction | Historic funding averages (24h–30d) in the terminal show whether a gap is stable or a spike. |
| Margin call on one leg | A full-size margin check before the trade starts; a margin shortfall during execution pauses the trade rather than compounding it. |
| Global market event | A platform-wide kill switch halts new trades and cancels running ones. |
No leg left unhedged. If one leg fills and the hedge can't complete, recovery checks your actual positions on both venues and sends the catch-up hedge. It never silently leaves you with a one-legged position.
What about pure arbitrage (price-difference, same instrument)?
Spreadr is built around two-leg perpetual spreads, not spot/perp arbitrage, triangular arb, or futures basis. The execution engine and risk model are specialized for that shape. Pure arb across spot markets is a different problem (custody, withdrawal latency, fiat rails) and Spreadr is intentionally not in that space.