How I Screen a Delta-Neutral Position

Before opening any position, I run through the same process every time. No shortcuts, no gut feelings. Here's the exact workflow.

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Quick Checklist

• Target APR defined (mine: 12%+)
• Leverage set (mine: x2)
• Funding 30D looks solid
• Cost 24H ≤ 0.5%
• Positive rate ≥ 80%
• Candidates favorited
• 7D funding trend: stable or rising
• Entry spread (1H → 24H → 7D): bot-friendly
• Exit spread: not aberrant
• Daily volume ≥ 3x position size on both DEXs
• Price trend matches funding direction

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Step 1 — Set Your Target

My target: 12%+ APR minimum.

Not exciting, not greedy. That's the floor. Anything below doesn't justify the capital locked up and the monitoring effort. Define yours before you start filtering — it keeps you disciplined.

New to delta-neutral? Read What Is Delta-Neutral Trading? first.

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Step 2 — Choose Your Leverage

My leverage: x2.

Why? Because it lets me match my total equity with my position size. With $10K deposited on each DEX, I open a $20K position on each side. My balance covers the position exactly — clean and simple.

Could I go higher? Sure. But higher leverage brings my stops closer. At x2, I can set my stop-loss around 40% price movement — that's wide, the market can breathe without knocking me out. At x3, my stops drop to around 25%. At x4, we're at ~20% — one volatile day is enough to trigger a stop and force me to close a position that was profitable. The higher the leverage, the tighter the stops, the more I need to watch.

Leverage	$10K Balance per DEX	Position per Side	Monitoring
x2	$10,000	$20,000	Relaxed — once or twice a day
x3	$10,000	$30,000	Active — check multiple times a day
x4+	$10,000	$40,000+	Stressful — constant vigilance needed

Higher leverage amplifies returns, but also amplifies the need to watch your position. For a strategy that's supposed to be low-maintenance, x2 is the sweet spot.

To understand how stops work in practice, see Protecting Your Position: SL/TP Configuration.

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Step 3 — Filter in the Scanner

Three filters, applied in order:

Funding Rate

Setting	Value
Period	30 Days
Slider	Don't touch it

30D shows structural yield, not noise. If it doesn't look good over a month, a 1-day spike won't save it.

Cost (Spread)

Setting	Value
Period	24 Hours
Maximum	0.5%

Why 0.5%? Simple math. At 12% APR, you earn roughly 0.033% per day. To recover a 0.5% entry cost, you need ~15 days just to break even. That's the maximum I'm willing to accept. Lower is always better.

Break-even formula: Cost % / (APR % / 365) = days to recover

Positive Rate

Setting	Value
Minimum	80%

If funding was negative more than 20% of the time, the pair is too unreliable. 80% is my floor — I prefer 85%+.

For a deeper dive on funding mechanics, see How Funding Rates Work. For a full walkthrough of the Scanner, see the Scanner Guide.

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Step 4 — Shortlist

Everything that passes all three filters gets favorited. These are my candidates. Usually 3-8 pairs survive.

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Step 5 — Simulate Each Candidate

Now I go one by one. Click through to the Simulator and check four things:

4a. Funding Trend (7D)

Switch to the 7-day funding chart.

• Is the trend stable or improving? Good.
• Is it declining sharply? Pass.
• Did it flip negative recently? Pass.

The 7D trend tells you where funding is going, not just where it's been.

4b. Entry Spread

Check the spread chart across three windows, in order:

Window	What it tells you
1 Hour	Current snapshot — is entry cheap right now?
24 Hours	Daily pattern — does spread compress at certain times?
7 Days	Structural behavior — can the bot consistently find good entries?

The goal: confirm that the bot has room to catch advantageous entry spreads over time, not just in this moment. For more on how spread impacts your yield, see Understanding Spread.

4c. Exit Spread

Same principle as entry. Check 1H, 24H, 7D.

Red flag: If exit spread is consistently 3-5x higher than entry spread, that's a trap. You'll get in cheap and pay through the nose to get out.

4d. Volume Check

Rule: your position size x3 = minimum daily volume required, on EACH platform.

Position Size	Min. Daily Volume per DEX
$5,000	$15,000
$10,000	$30,000
$20,000	$60,000
$50,000	$150,000

Low daily volume = slippage on entry, slippage on exit, and potential difficulty closing in a hurry. Non-negotiable.

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Go / No-Go

Check	Criteria
30D APR	12%+
Leverage	x2 (balance = position)
24H Cost	0.5% max
Positive %	80%+
7D Funding trend	Stable or rising
Entry spread (7D)	Tight, bot-friendly
Exit spread	Not aberrant
Volume	3x position size, both sides

All green → Open the position. See the step-by-step guide if it's your first time. Any red → Pass. Move to the next candidate.

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Bonus — Quick Technical Analysis Check

Stable funding doesn't appear out of nowhere. It's usually tied to a stable price trend — up or down, doesn't matter. What matters is that the market has conviction in one direction.

Before I commit, I pull up the price chart for the asset and ask one question: does the trend match the funding?

• Strong uptrend + consistently positive funding → Longs are paying shorts. The trend is sustaining the funding. Makes sense — green light.
• Strong downtrend + consistently negative funding → Shorts are paying longs. Also makes sense — just make sure you're positioned on the right side.
• Choppy, sideways price + stable funding → Worth investigating. Funding can stay directional in ranges, but it's less reliable. Proceed with caution.
• Trend reversal starting + funding still high → Danger zone. If the price trend that was sustaining the funding flips, funding will follow — often fast. This is where positions go from profitable to underwater.

I don't do deep technical analysis. No indicators, no patterns. Just: zoom out, look at the trend over the same period as your funding filter (30D), and check that the two tell a coherent story. If the chart and the funding agree, the setup is solid. If they disagree, something is about to change — and you don't want to find out what while holding a position.

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This is my personal screening process — not financial advice. Adapt the thresholds to your own risk tolerance and capital. For a full overview of the risks involved, read The Risks of Delta-Neutral Trading.