Revenue
Funding Mechanics. Trading Advantage.
Funding in Perpetual Futures is a crucial mechanism that helps ensure the market price aligns with the underlying index price.
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Funding Rates Calculation
The funding rate is determined by the difference between the perpetual contract's price and the spot index price. If the contract is priced higher, long positions pay short positions, and vice versa.
Payment Frequency
Funding payments occur regularly (e.g., every 8 hours) and are automatically processed by the platform.
Earning Through Funding
When a trader holds a position that is on the receiving end of the funding rate, they earn money.
For example, if shorts are paying longs (indicated by a positive funding rate), traders holding long positions receive payments.
Funding Features That Power Your Trading
OPPORTUNITIES OF USAGE
You can earn additional income by strategically taking positions that benefit from the funding mechanism.
Understanding funding rates can help manage potential trading costs when holding positions for extended periods.
Encourages to develop strategies that consider not just price movements but also potential earnings from funding dynamics.
Provides insights into interest rate trends and potential shifts in market conditions.
Earn Additional Income from Funding
Example scenario
A trader holds a long position in a perpetual futures contract for a cryptocurrency.
Condition
The funding rate is positive — perpetual futures trade above the spot price, so long positions receive funding payments from short positions.
Funding Payment =
Position Size × Funding Rate
Scenario Calculations
Position Size → $10,000
Funding Rate → 0.03%*
Interval → 8 hours
*Funding rates change and can be negative; settlement depends on the exchange. Not investment advice.