Funding Regime Capture

Funding Regime Capture is the core of the book. Systematic carry harvesting on small-capitalisation perpetuals, where funding is persistently and often extremely negative because the contract population is bag-hedgers and speculators fading pumps — both paying to hold. We take the long side, hedged discretely per position, and collect the rent.

Construction

Each position is a hedged pair on the same contract — long and short held simultaneously. In its ground state the pair is balanced 50/50 with no directional exposure. When funding is deeply negative, the bot tilts the pair long — for example 60/40 — sized so the net long collects what the short crowd is paying. The tilt is set by the funding signal, not by a price prediction, and walks back toward neutral as funding normalises.

Discrete Per-System Hedging

Every system is individually hedged on its own contract. Delta is neutralised or ameliorated at the pair level — not netted across the book, not proxied through a correlated instrument, not offset by beta to BTC or ETH. Small caps do not have usable IV surfaces and their spot books are too thin to hedge against, so no cross-asset hedge is even structurally available. The hedge is the second leg of the pair itself. If a position can't be hedged inside its own contract, it isn't opened.

Execution & Sizing

Systematic rebalancing clips volatility as the pair oscillates — a formalisation of Shannon's Demon, and small caps oscillate violently. Funding accrues on the tilt in parallel. Positions close when the carry normalises or the contract falls below volatility and funding floors. Sizing is capped as a low single-digit fraction of each market's open interest and depth — the strategy is sized to the market, never to the account.