In the fast-moving world of cryptocurrency, asset prices can fluctuate dramatically—especially during sudden market events. These price swings often create temporary discrepancies between spot and futures markets. For alert traders, such imbalances present a valuable opportunity: arbitrage trading.
While seasoned traders may act quickly to exploit these gaps, most users lack the experience or tools to execute arbitrage efficiently. That’s where OKX’s arbitrage trading strategy comes in—a powerful, user-friendly solution that simplifies the process and helps traders capitalize on market inefficiencies with minimal risk.
This guide will walk you through everything you need to know about arbitrage trading on OKX, from core concepts to step-by-step execution. Whether you're managing a large portfolio or just starting out, this low-risk strategy can help you hedge against volatility and generate consistent returns.
What Is Arbitrage Trading?
Arbitrage is the practice of simultaneously buying and selling an asset across different markets to profit from price differences. In crypto, this commonly occurs between spot markets (immediate delivery) and futures markets (future delivery), especially perpetual contracts.
Because crypto markets are decentralized and highly volatile, brief pricing mismatches happen frequently. Arbitrageurs help correct these imbalances, contributing to market efficiency while earning a profit in the process.
On OKX, the "Combo Arbitrage" feature enables users to place two coordinated trades—known as "two-legged orders"—to lock in risk-free or low-risk gains from these discrepancies.
Types of Arbitrage on OKX
OKX automatically recommends arbitrage pairs under two main categories:
1. Price Spread Arbitrage
This involves capitalizing on price differences between the spot and futures markets. For example:
- Buy BTC in the spot market
- Sell BTC perpetual futures at a higher price
If the price gap is wide enough to cover fees and slippage, this creates a near-risk-free profit when both positions are closed.
2. Funding Rate Arbitrage
Perpetual contracts include a funding rate mechanism that periodically transfers value between long and short positions. When funding rates are high, traders can earn passive income by taking the receiving side.
👉 Discover how to earn from funding rate arbitrage with zero market risk
For example:
- If the BTCUSDT perpetual contract has a positive funding rate, longs pay shorts.
- You can go short on futures and buy an equivalent amount of BTC in spot, neutralizing price exposure.
- Every 8 hours, you receive funding payments—essentially earning yield regardless of BTC’s price movement.
This strategy is particularly effective during bullish sentiment when long positions dominate.
Step-by-Step: How to Use OKX Arbitrage Orders
Follow these simple steps to start arbitraging on OKX:
Step 1: Open the Trading Interface
- Launch the OKX app
- Tap [Exchange] > [Trade]
Step 2: Access Combo Arbitrage
- Select [Combo Arbitrage]
- Choose [Arbitrage Order]
You’ll see three main sections:
- Top: Available arbitrage pairs and order book depth
- Middle: Order entry panel for both legs
- Bottom: Confirmation summary
Step 3: Select Your Arbitrage Pair
Use the dropdown on the top left to browse recommended pairs. You can filter by:
- Funding rate (high positive or negative)
- Price spread percentage
- Trading volume
Alternatively, manually search for opportunities based on your analysis.
Step 4: Execute a Two-Legged Order
Let’s use BTCUSDT perpetual funding rate arbitrage as an example:
- Check the current funding rate in the depth chart
If it's positive, set:
- Leg 1: Sell BTCUSDT perpetual (short futures)
- Leg 2: Buy BTC/USDT spot (equal value)
- Enter your desired quantity
- Tap [Two-leg Order] > [Confirm]
This simultaneous execution minimizes slippage and ensures balanced exposure.
Why Use Two-Legged Orders?
Standard manual trading risks timing delays—by the time you place both orders, prices may shift, eroding your profit margin. The two-legged order system on OKX solves this by:
- Executing both trades instantly
- Reducing execution risk
- Automatically balancing notional values
- Displaying net cost, fees, and expected return upfront
This level of automation makes arbitrage accessible even to beginners.
Managing Risk and Exit Strategy
While arbitrage is considered low-risk, it's not entirely risk-free. Consider the following:
- Liquidity Risk: Large positions may face slippage if markets lack depth
- Funding Rate Reversals: A positive funding rate can turn negative—monitor trends closely
- Exchange Risk: Technical issues or withdrawals halts can impact settlement
👉 Learn how to protect your profits with smart exit triggers
Always monitor your open arbitrage positions. You can choose to:
- Hold until funding payments accumulate (ideal for stable rates)
- Close early if spreads narrow unexpectedly
- Roll positions forward if favorable conditions persist
Many traders set price alerts or use conditional orders to automate exits.
Benefits of Arbitrage Trading on OKX
- Low Market Exposure: Positions are hedged—profits come from spreads or funding, not price direction
- Passive Income Potential: Especially with funding rate arbitrage
- High Execution Efficiency: Built-in tools reduce manual errors and latency
- Beginner-Friendly Interface: No need for complex scripts or APIs
- Real-Time Analytics: View spreads, funding trends, and historical data directly in-app
These advantages make OKX one of the most attractive platforms for systematic crypto trading.
Frequently Asked Questions (FAQ)
Q1: Is arbitrage trading risk-free?
While arbitrage minimizes market risk through hedging, it's not completely risk-free. Risks include execution delays, liquidity crunches, exchange-specific issues, and sudden changes in funding rates. Always assess conditions before entering a trade.
Q2: How often are funding rates paid on OKX?
Funding rates on OKX perpetual contracts are settled every 8 hours, at 04:00, 12:00, and 20:00 UTC. Profits from funding arbitrage accumulate with each payment cycle.
Q3: Can I perform arbitrage with small accounts?
Yes. While larger capital increases absolute returns, OKX allows small-scale arbitrage with minimal position sizes. Just ensure spreads or funding rates are sufficient to cover transaction costs.
Q4: Do I need programming skills to use OKX arbitrage tools?
No. The Combo Arbitrage interface is fully manual and intuitive. No coding or API setup is required—everything can be done through the mobile or web app.
Q5: What happens if one leg of my order fails?
OKX’s two-legged system is designed for atomic execution—either both orders go through, or neither does. This prevents partial fills that could leave you exposed to market risk.
Q6: Are there fees for arbitrage trading?
Yes, standard trading fees apply to both spot and derivatives legs. However, OKX offers competitive fee tiers based on trading volume and OKB holdings, helping maximize net returns.
Final Thoughts: Building a Smarter Crypto Strategy
Arbitrage trading isn’t about chasing moonshots—it's about consistent, calculated gains. With tools like OKX’s Combo Arbitrage, even retail investors can participate in sophisticated strategies once reserved for quant funds.
By leveraging temporary market inefficiencies, you’re not only protecting your portfolio from volatility but also turning market noise into income.
👉 Start practicing arbitrage with real-time data and low-latency execution
Remember: success in arbitrage comes from discipline, timing, and continuous monitoring. Stay informed, start small, and scale as you gain confidence.
Whether you're looking to hedge your holdings or generate supplemental yield, integrating arbitrage into your trading routine can be a game-changer in 2025 and beyond.
Always conduct your own research and consider consulting a financial advisor before engaging in any trading activity.