This seems silly. Perpetual futures generally trade at a much higher annualized premium to the underlying than quarterly futures. Also, quarterly futures regularly experience significant changes in the amount of contango, so it is possible to lose money if you are forced to exit early. Also, even if the amount of contango remains unchanged, if you are long the spot and short the quarterly, and the underlying goes up, you will have a negative USD balance that will either result in liquidation or paying spot borrow rates on USD.
So the quarterly version of the trade is a lot riskier and pays a lot less. Thanks.
Hello,
Thanks for the detailed write-up. My experience so far is that if I explain this trade in excruciating detail to individual community members, they require more work from me than is involved in establishing a Cayman Islands limited fund before deciding that they don’t have time to read my emails because everything else they are doing has higher expected value, or they say things like “if such an opportunity really existed, mastrblastr would already have lent you seven figures, so why are you talking to me?”
As an aside, you probably do not want to do this trade with AMPL, because it is a rebasing token. The amount of spot you are long will change at the rebase. The amount of perpetual futures you are short will not change. This is bad.