Understanding the Hot Tub Strategy
Too Long; Didn't Read
The strategy for [Hot Tub] is based on arbitrage, a very low risk trading technique that profits from price differences for a particular asset across multiple trading venues. Arbitrage is buying ETH on one exchange, then selling the same ETH using another exchange quoting a higher price. The strategy takes advantage of profitable arbitrage opportunities as they occur - when the price of ETH diverges significantly between perpetual futures and spot markets. In the future, we may even expand the strategy to include many more assets.