Funding carry: net returns and capital allocation

Hypothetical example: with 10,000 USDT notional per contract and matched settlement periods, a short receiving 2% funding produces 200 USDT before costs. Hedging with an unborrowed spot holding does not add perpetual funding charges and need not use the same venue.

Adding a long perpetual with a positive 0.222% funding rate reduces receipts to 177.80 USDT. A long with a negative 0.3% rate instead raises gross receipts to 230 USDT, but adds separate margin and execution risks. These hypothetical scenarios compare position structures.

Assume four executions of 10,000 USDT each, with 0.04% fees and 0.02% slippage per execution. Round-trip cost is 24 USDT. One 200 USDT funding receipt leaves 176 USDT before basis P&L, financing, transfers, and tax.

If spot, margin, and reserves total 17,000 USDT, that amount is approximately 1.04% of allocated capital. A further 250 USDT basis loss changes total P&L to minus 74 USDT. Total P&L combines funding, basis changes and execution costs.

Verify the actual spot market, contract multiplier, settlement eligibility, native interval, depth, and both margin systems. Forecast funding can change. Annualized comparisons require an explicit assumption about future settlement rates.