# Using Delta-Neutral Bot

## Delta Neutral / Funding Rate Arbitrage Bot Guide

The Delta Neutral bot on HyperFlash enables you to capture funding rate differentials between exchanges while maintaining a market-neutral position. By simultaneously holding opposing positions (long on one exchange, short on another), you can profit from funding rate payments without exposure to price movements.

***

### Understanding Funding Rate Arbitrage

Funding rate arbitrage exploits the difference in perpetual futures funding rates between exchanges. When you go long on one exchange and short on the same asset on another exchange:

* Your **net market exposure is zero** (delta neutral)
* You **collect funding payments** when the spread is favorable
* **Price movements cancel out** between the two positions

This strategy generates yield regardless of whether the market goes up or down.

***

### Funding Rate Arb Opportunities

Navigate to **Trading Bots > Funding Rate Arb Opportunities** to view all available arbitrage opportunities.

#### Opportunities Table

The main table displays all current funding rate arbitrage opportunities:

| Column                 | Description                                                                   |
| ---------------------- | ----------------------------------------------------------------------------- |
| **Asset**              | The trading pair/token (e.g., LIT, ZK, FARTCOIN, MEGA, APEX, TRUMP, XAG, WLD) |
| **Long / Short**       | Icons indicating which exchange to go long and which to go short              |
| **Max Leverage**       | Maximum leverage available for the opportunity (3x, 5x, 10x, 20x)             |
| **APR / Annualized**   | Current funding rate and annualized return (e.g., 0.0266% / 11.0/-255.5%)     |
| **APR / Max Leverage** | Annualized return at maximum leverage (e.g., 0.1332%)                         |
| **Price Spread**       | Current price difference between exchanges (e.g., 0.000%)                     |
| **Open Interest**      | Available liquidity for the opportunity                                       |

#### Example Opportunities

| Asset    | Max Leverage | APR / Annualized         | APR / Max Leverage |
| -------- | ------------ | ------------------------ | ------------------ |
| LIT      | 5x           | 0.0266% / 11.0/-255.5%   | 0.1332%            |
| ZK       | 5x           | 0.0258% / -315.1/-573.5% | 0.1292%            |
| FARTCOIN | 10x          | 0.0134% / 11.4/-123.0%   | 0.1344%            |
| MEGA     | 3x           | 0.0132% / 11.0/-121.1%   | 0.0396%            |
| APEX     | 10x          | 0.0110% / 11.0/-99.0%    | 0.1099%            |
| TRUMP    | 20x          | 0.0090% / -47.1/-137.5%  | 0.1808%            |
| XAG      | 10x          | 0.0073% / 83.4/10.0%     | 0.0734%            |
| WLD      | 5x           | 0.0063% / 11.4/-52.0%    | 0.0317%            |

#### Filtering and Search

* Use the **Search asset...** field to find specific tokens
* Click **Filters** to narrow down opportunities by various criteria
* The table shows **1-10 of 200 opportunities** with pagination controls

***

### Opening a Delta Neutral Position

Click on any opportunity row to open the position configuration panel.

#### Position Overview

When you select an asset (e.g., LIT), you'll see a summary header showing:

| Metric                 | Example Value                    |
| ---------------------- | -------------------------------- |
| **Asset**              | LIT                              |
| **Long / Short**       | Exchange icons showing direction |
| **Max Leverage**       | 5x                               |
| **APR / Annualized**   | 0.0266% / 11.0/-255.5%           |
| **APR / Max Leverage** | 0.1332%                          |

#### Historical Data Chart

The chart displays **Last 7 days** of data with three view options:

* **Funding** (default) - Shows funding rate history
* **Price** - Shows price movements
* **Open Interest** - Shows liquidity over time

The chart displays three data series:

* **Long (pacifica)** - Green dashed line showing long-side funding
* **Short (hyperliquid)** - Yellow dashed line showing short-side funding
* **Spread** - Cyan line showing the funding spread between exchanges

***

### Position Configuration

#### Position Size

Enter your desired position size in the input field:

* Example: **2475.66**
* Select currency: **USD** (dropdown)

#### Leverage

Adjust leverage using the slider:

* Range: 1x to Max Leverage (varies by asset)
* Example: **3x** leverage

> ⚠️ **Note:** Higher leverage amplifies both returns and liquidation risk.

#### Advanced SL/TP Settings

Expand this section to configure stop loss and take profit parameters:

**Distance from Liquidation to Close**

Set how close to liquidation the bot should close your position:

* Adjustable slider
* Example: **1x** distance

**Max Slippage**

Configure maximum acceptable slippage when closing positions:

| Option  | Description              |
| ------- | ------------------------ |
| **1%**  | Tight slippage tolerance |
| **3%**  | Moderate tolerance       |
| **5%**  | Wider tolerance          |
| **10%** | Maximum tolerance        |

**Closing Prices**

Displays the estimated closing prices for both legs of the position.

***

### Exchange Connections

You must connect **both exchanges** to open a delta neutral position.

#### Long Side

The long position panel shows:

* **Exchange name**: e.g., pacifica
* **Connection status**: "Not Connected" or "Connected"
* **Connect button**: Click to authorize the exchange

#### Short Side

The short position panel shows:

* **Exchange name**: e.g., hyperliquid
* **Connection status**: "Connected" (green checkmark) or "Not Connected"

> ⚠️ **Important:** You must connect both exchanges before opening a position. The message "Connect both exchanges to open position" appears until both are connected.

***

### Order Configuration

#### Order Type

Select your order execution type from the dropdown:

* **Market** - Execute immediately at current prices

#### Slippage Tolerance

Choose your acceptable slippage for market orders:

| Option   | Risk Level |
| -------- | ---------- |
| **0.5%** | Very tight |
| **1%**   | Tight      |
| **3%**   | Moderate   |
| **5%**   | Wide       |

***

### Pre-Trade Information

Before opening a position, review the following metrics:

| Metric                     | Description                    | Example           |
| -------------------------- | ------------------------------ | ----------------- |
| **Required Margin**        | Margin needed for the position | $825.22           |
| **Position Size**          | Total position size            | -- (calculated)   |
| **Mid Price**              | Current mid-market price       | --                |
| **Est. Liquidation Price** | Estimated liquidation level    | --                |
| **Est. Entry Price**       | Expected entry price           | --                |
| **Est. Slippage**          | Expected slippage              | 0.00%             |
| **Funding Rate (8h)**      | Current 8-hour funding rate    | 0.0120% / 0.0100% |

#### Details Panel

Expand the **Details** section for additional information:

| Metric                    | Description                        | Example          |
| ------------------------- | ---------------------------------- | ---------------- |
| **8h Spread / APR**       | Funding spread and annualized rate | -0.002% / -0.02% |
| **Total Position Size**   | Combined size of both legs         | $4,951.32        |
| **Total Margin Required** | Total margin across both exchanges | $1,650.44        |
| **1h Funding Spread**     | Hourly funding rate spread         | -0.0003%         |

***

### Opening the Position

1. **Connect both exchanges** - Ensure both long and short exchanges show "Connected"
2. **Enter position size** - Input your desired USD amount
3. **Set leverage** - Adjust to your risk preference
4. **Configure slippage** - Choose appropriate tolerance
5. **Review metrics** - Check required margin and estimated values
6. **Click "Open Position"** - Execute the delta neutral trade

***

### Managing Positions

#### Positions Table

Monitor your open and closed positions in the **Positions** section:

| Tab        | Description                              |
| ---------- | ---------------------------------------- |
| **Open**   | Currently active delta neutral positions |
| **Closed** | Historical closed positions              |

#### Position Columns

| Column      | Description                   |
| ----------- | ----------------------------- |
| **Mode**    | Position type (Delta Neutral) |
| **Pair**    | Trading pair                  |
| **Account** | Connected accounts            |
| **Fees**    | Trading fees paid             |
| **RPNL**    | Realized Profit and Loss      |
| **Spread**  | Captured funding spread       |
| **Filled**  | Position fill status          |
| **Status**  | Current position status       |
| **Actions** | Close/modify position         |

***

### How Funding Payments Work

#### Payment Schedule

* Funding payments occur every **8 hours** on most exchanges
* The **Funding Rate (8h)** shows the rate for the next payment period

#### Collecting Payments

When your position is correctly set up:

* If **long funding > short funding**: You pay on the long side, receive on the short side
* If **short funding > long funding**: You receive on the long side, pay on the short side
* Your **net result** depends on the spread between the two rates

#### APR Calculation

The **APR / Max Leverage** figure shows your potential annualized return:

* Base APR × Leverage = Leveraged APR
* Example: 0.0266% × 5x = 0.1332% per funding period

***

### Risk Management

#### Price Risk

Delta neutral positions **eliminate directional price risk** since gains on one leg offset losses on the other.

#### Funding Rate Risk

* Funding rates **change every 8 hours**
* The spread can become **negative**, causing losses
* Monitor the **Historical Data** chart for rate trends

#### Liquidation Risk

* Each leg can be **liquidated independently**
* Use the **Distance from Liquidation** setting to auto-close before liquidation
* Higher leverage = higher liquidation risk

#### Slippage Risk

* Large positions may experience **execution slippage**
* Use **limit orders** when available for better fills
* Set appropriate **Max Slippage** tolerance

***

### Best Practices

1. **Start with lower leverage** - 2-3x until you understand the dynamics
2. **Monitor funding rate trends** - Check the 7-day historical chart before entering
3. **Avoid negative spreads** - Only enter when the spread is consistently positive
4. **Set stop losses** - Configure the Distance from Liquidation setting
5. **Check both exchanges** - Ensure sufficient margin on both sides
6. **Consider fees** - Trading fees and funding payments affect net returns
7. **Watch price spreads** - Large price spreads between exchanges can affect entry/exit
8. **Diversify across assets** - Don't concentrate all capital in one opportunity

***

### Troubleshooting

#### Cannot Open Position

* Verify both exchanges are connected
* Check sufficient margin on both exchanges
* Ensure position size meets minimum requirements

#### Position Showing Losses

* Funding rate spread may have reversed
* Check current rates vs. entry rates
* Consider closing if spread remains negative

#### High Slippage on Entry/Exit

* Reduce position size
* Use tighter slippage settings
* Check liquidity (Open Interest) before entering

#### Exchange Connection Issues

* Refresh the page
* Re-authenticate with the exchange
* Check exchange API status

***

### Glossary

| Term              | Definition                                        |
| ----------------- | ------------------------------------------------- |
| **Delta Neutral** | A position with zero net market exposure          |
| **Funding Rate**  | Periodic payment between long and short traders   |
| **APR**           | Annual Percentage Rate - annualized return        |
| **Spread**        | Difference between funding rates on two exchanges |
| **Liquidation**   | Forced closure when margin is insufficient        |
| **Slippage**      | Difference between expected and executed price    |
| **Open Interest** | Total value of outstanding positions              |
| **8h Rate**       | Funding rate for an 8-hour period                 |

***

*Last updated: February 2026*


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