Holding and exiting: margin, rebalancing and when to close a setup
Opening a setup is half the job. While it is open, the price moves, margin flows between the legs and the rate difference changes. We look at what to check every day, how to rebalance margin, when to close and how to sum up the trade.
The setup is open (lesson 7). Now the job is to hold it while the rate difference pays off and to exit in time. The position does not live on its own: the price moves, margin flows from one leg to the other, rates change every interval.
Daily checks
- Payments. Compare the funding history on both exchanges with the rates. The setup earns the difference, not one leg’s rate.
- Spread. The current rate difference and its trend on the pair page in the scanner. One weak payment is not a reason to exit; a series is.
- Margin. The distance to liquidation on both legs. If one leg gets closer than a level chosen in advance — rebalance.
- Price spread. The price gap between the long and short legs compared with entry: it will determine the result at close.
- Announcements. Funding interval or cap changes, delistings, deposit and withdrawal maintenance on both exchanges.
Rebalancing margin
Example: a $2,000 position per leg, 2× leverage, entry at $1.00. The price rose 10%: the short is down $200, and the long on the other exchange is up the same. The short’s liquidation price has not changed (about $1.495), but the distance to it is now about 35.9% instead of 49.5%. A couple more moves like that and the short is in danger.
| Method | How it works | Downsides |
|---|---|---|
| Add margin from the reserve | Add margin to the isolated position on the exchange where the leg is losing | Requires a reserve on each exchange in advance |
| Cut both legs equally | Close the same share of the long and the short — margin is freed | Closing fees; the position and income get smaller |
| Move USDT from the profitable exchange | Realize part of the winning leg’s profit and withdraw USDT to the other exchange | Transfer time, network fees, risk of a network mistake; the legs are unequal during the transfer |
| Close and reopen | Close both legs and reopen at current prices with fresh margin | Fees for four trades; the price spread may change |
When to close
| Signal | What to do |
|---|---|
| The spread is below break-even for several payments in a row | Close: the setup has stopped earning |
| The rate flipped sign | Close if the reversal lasts more than one payment |
| The price spread converged in your favor | You can close and lock in payments plus the price gain |
| A noticeably better setup appeared | Compare after closing fees and the new entry |
| A risk event | Sharp volatility, a depeg, a delisting, exchange problems — cut or close in advance |
How to close
- 1
Close both legs at the same time
With the same number of coins as at entry. Reduce-only orders prevent accidentally opening a position in the opposite direction. - 2
Check that no positions remain
A leftover of a few coins on one exchange is no longer a hedge but an open bet on price. - 3
Work out the result
Funding payments from the funding history − fees for all trades ± the price result of both legs (including the price spread at entry and exit).
Records and taxes
Export the funding and trade history from both exchanges and keep your log. In many countries funding payments and derivatives results are taxable, and the rules for them differ from those for spot. Check your country’s rules.
Frequently asked questions
What should I check while a setup is open?
Whether payments arrived on both exchanges, what the spread is now, how far liquidation is on each leg, how the price spread has changed and whether exchanges announced interval changes or delistings.
How do I move margin from one exchange to another?
Realize part of the winning leg’s profit and withdraw USDT to the other exchange on a network it supports. This takes time, so the main tool for a sharp move is a reserve already sitting on each exchange.
When should I exit a setup?
When the rate difference has been below break-even for several payments in a row, the rate flipped sign, the price spread converged in your favor, a noticeably better setup appeared or a risk event occurred.
How do I calculate the trade result?
Add up all funding payments from the funding history, subtract the fees for all trades and add the price result of both legs — it accounts for the price spread at entry and exit.
Sources
- 1.How to Withdraw Crypto from BinanceBinance9/18/2026official
- 2.How to Calculate Liquidation Price of USDⓈ-M Futures ContractsBinance12/31/2025
- 3.Introduction to Binance Futures Funding RatesBinance3/6/2026
- 4.P2P.Army: funding rate arbitrage scannerP2P.Army10/31/2026
About the author
Crypto expert, arbitrage trader and investor
Crypto expert and hands-on crypto arbitrage trader, investor and software developer with over 20 years of experience. On the P2P.Army blog he covers exchange news, P2P and cross-exchange arbitrage.
- Crypto arbitrage
- P2P arbitrage
- Cross-exchange arbitrage
- Crypto exchanges
- Investing
- Software development
