Cash and carry trade in crypto: Hyperliquid spot and perp
The crypto cash and carry trade on Hyperliquid: spot long, perp short, the capital it ties up, the fees, the break-even hold and the return on $10,000.
By the Prow teamPublished 8 min read
On this page
- What is a cash and carry (basis) trade?
- How does it work on Hyperliquid?
- How much does the trade earn? A worked example
- What happens when funding turns negative?
- How much capital does it tie up, and what about the account mode?
- Which coins can you do it with?
- What can go wrong?
- Do it by hand or with a bot?
- Frequently asked questions
- Is cash and carry the same as funding rate arbitrage?
- How long do I need to hold to cover the fees?
- Can the short be liquidated if I hold the spot?
- What is the difference between the basis trade with dated futures and with perps?
- Sources
A cash and carry trade in crypto means buying a coin on the spot market and shorting the same amount on its perpetual future. The two price moves cancel out, and the short collects funding for as long as funding is positive. On Hyperliquid funding is paid every hour. At the usual baseline rate the short collects about 11% a year on the position before fees. That is about 7% a year on all the money the trade ties up in the example below. Funding can turn negative, and then the short pays instead.
What is a cash and carry (basis) trade?
Eight terms cover it:
- Spot is the coin itself. You buy it and you own it.
- A perp (perpetual future) is a contract that follows the coin's price and never expires.
- A short is a perp position that gains when the price falls and loses when it rises. A long is the opposite.
- Margin is the money you put up to hold a perp position. At 2x leverage the margin is half of the position's value.
- Liquidation is the venue closing a perp position because its losses have used up its margin. Spot cannot be liquidated.
- Funding is a small payment between longs and shorts on a perp. When the rate is positive, longs pay shorts.
- Basis is the gap between the perp price and the spot price.
- Delta neutral means the position as a whole does not gain or lose when the price moves.
Long spot plus a short perp of the same size is delta neutral. If the coin rises 10%, the spot gains what the short loses. What is left is the funding, minus fees.
Other names for it are funding farming, spot-perp arbitrage and the basis trade. It is the single-venue version of funding rate arbitrage, which holds the two sides on two venues.
How does it work on Hyperliquid?
- Buy the coin on Hyperliquid spot. You pay the full price in USDC, the dollar stablecoin Hyperliquid uses.
- Short the same number of coins on the coin's perp. Match the size in coins, not in dollars. At 2x leverage the short needs margin of half its value.
- Collect funding every hour. The payment is the position's value times the hourly rate. The baseline is 0.00125% per hour, paid by longs to shorts. See where that number comes from.
- Close both sides together. Buy back the short and sell the spot at the same moment.
The trade only works while funding is positive. Collecting negative funding would need a long perp and a short on spot, and spot cannot be shorted.
How much does the trade earn? A worked example
You buy $10,000 of a coin on spot and short $10,000 of it on the perp at 2x. Every order fills at once, so it pays the taker fee. Hyperliquid's taker fees with no volume discount are 0.07% on spot and 0.045% on perps (Hyperliquid fee page, checked October 7, 2026; see the fee comparison).
Capital used
| Amount | |
|---|---|
| Spot bought, full value | $10,000 |
| Margin for the short at 2x | $5,000 |
| Total tied up | $15,000 |
Funding received at the baseline, 0.00125% per hour
| Period | Funding | Share of the $10,000 position |
|---|---|---|
| 1 hour | $0.125 | 0.00125% |
| 1 day | $3.00 | 0.03% |
| 1 year (8,760 hours) | $1,095 | 10.95% |
Fees on the four orders
| Spot 0.07% of $10,000 | Perp 0.045% of $10,000 | Total | |
|---|---|---|---|
| Open | $7.00 | $4.50 | $11.50 |
| Close | $7.00 | $4.50 | $11.50 |
| Round trip | $14.00 | $9.00 | $23.00 |
Result
| Baseline rate (10.95% a year) | Higher rate (25% a year) | |
|---|---|---|
| Funding per day on $10,000 | $3.00 | $6.85 |
| Days to earn back $23.00 of fees | $23 ÷ $3.00 = about 8 | $23 ÷ $6.85 = about 3.4 |
| 30-day hold, funding minus fees | $90 − $23 = $67 | $205 − $23 = $182 |
| Funding per year | $1,095 | $2,500 |
| Yearly funding as a share of the $15,000 tied up, before fees | about 7.3% | about 16.7% |
Three things to read from this:
- The headline rate is on the position, not on your money. 10.95% on $10,000 is 7.3% on the $15,000 used.
- Short holds lose. At the baseline, the first 8 days only pay back the fees. Slippage, the gap between the price you expect and the price you get, adds to that.
- A yearly rate is a pace, not a result. The 25% column is an example, not a forecast. High funding attracts shorts, and the rate falls.
From Jan 1, 2027, trading through Prow adds the Prow fee of 0.025% on three of the four orders: $7.50 on this round trip. Spot buys on Hyperliquid carry no Prow fee. Until then the Prow fee is 0%. See Fees.
Check the live rate first: all coins, BTC, HYPE. Each coin page shows 7-day and 30-day averages.
What happens when funding turns negative?
The short pays instead of receiving. Suppose the same position earns the baseline for 5 days, then pays it for 3 days:
| Amount | |
|---|---|
| 5 days of positive funding | +$15.00 |
| 3 days at −0.00125% per hour | −$9.00 |
| Fees, round trip | −$23.00 |
| Result if you close now | −$17.00 |
Negative funding is common. Prow's research covered 25 Hyperliquid coins from July 2024 to October 2026. On the median coin the short paid funding on about 1 day in 7, and still collected about 9.5% a year over the whole period. On some coins the short paid for long stretches.
When to leave: closing and reopening costs $23.00, about 8 days of baseline funding. So a few negative hours are not a reason to close. A 7-day average below zero is.
How much capital does it tie up, and what about the account mode?
The spot side is paid in full, and the short needs margin on top. At 2x that is 1.5 times the position. At 1x it is 2 times ($20,000 here), and the baseline pays about 5.5% a year on it.
Hyperliquid's account modes change where the money sits (Hyperliquid docs, checked October 7, 2026):
| Mode | Balances | What it means for this trade |
|---|---|---|
| Standard | Separate spot and perp balances | You move USDC between them by hand. The short uses only the perp balance |
| Unified account | One balance per asset, shared by spot and cross perps | No transfers. Hyperliquid's page names USDC as the margin, not the coin you bought |
| Portfolio margin | One portfolio of the eligible assets: HYPE, BTC, USDC, USDT | Only these assets count toward the short's margin |
A short is cross or isolated. In cross margin it shares the account's whole USDC balance with your other positions. A loss elsewhere moves this short closer to liquidation. In isolated margin only the margin you gave the short is at risk. See Liquidation and the Glossary.
Which coins can you do it with?
Only coins that have both a spot pair and a perp on Hyperliquid. Check two more things:
- Is the spot coin bridged? BTC, ETH and SOL on Hyperliquid spot are bridged tokens (UBTC, UETH, USOL) that come through Unit. HYPE is native.
- Is the spot market deep enough? On a small coin a $10,000 order can move the price, and that slippage is paid twice.
The perp markets page lists each coin's trading volume.
What can go wrong?
Delta-neutral risks puts numbers on each of these. Hyperliquid liquidation price shows where the short gets closed.
Do it by hand or with a bot?
By hand, you have four jobs:
- Open both sides at the same moment.
- Keep the two sizes equal.
- Watch the short's distance to liquidation, and add margin when a rise eats it.
- Watch funding, and leave when it stays negative.
Each has to be done on time, day and night.
If you already hold the coin, Prow's Spot hedge does the perp side. It opens one short of the size you set, isolated at 1x or 2x, and places a guard stop before the liquidation price. It sends an alert when margin runs low or when the short starts paying funding. It never trades your spot and it cannot move money. Read Spot hedge first. It is in the app under Bots > Create > Spot hedge.
How crypto arbitrage bots work compares this trade with the cross-venue kinds.
Frequently asked questions
Is cash and carry the same as funding rate arbitrage?
Cash and carry is one kind of funding rate arbitrage. It holds spot and a short perp on one venue and collects that perp's funding. The cross-venue kind holds a long perp on one venue and a short perp on another. It collects the difference between the two funding rates.
How long do I need to hold to cover the fees?
Divide the fees to open and close by the funding per day. On Hyperliquid a $10,000 cash and carry position costs $23.00 in taker fees to open and close. At the baseline rate it earns $3.00 a day, so the fees take about 8 days to earn back, before slippage. At 25% a year it is about 3.4 days.
Can the short be liquidated if I hold the spot?
Yes. In a cash and carry trade the short loses when the price rises, and the coin you hold does not add to an isolated short's margin. If the price rises far enough, Hyperliquid closes the short and you are left with spot alone. Lower leverage and more margin move that point away.
What is the difference between the basis trade with dated futures and with perps?
A dated future expires on a set day, and its price meets the spot price on that day. The gap you sell at entry is your income, known in advance. A perp never expires, so the income is funding, which changes every hour and can turn negative.
Sources
Checked October 7, 2026:
- Hyperliquid docs: Funding, Fees, Account abstraction modes
- Unit docs: the asset tokenization layer on Hyperliquid
- Prow docs: Fees, Liquidation, Balances, Glossary
- Prow research: a short held against spot on 25 Hyperliquid coins, hourly funding, July 2024 to October 2026