Funding Rates Explained: The Perp Fee Most Traders Ignore
Learn what funding rates are in perpetual futures, how they are calculated, and how funding can turn profitable trades into losses over time.
Funding is a recurring cost (or income) that compounds over time. It matters most when you hold positions across multiple intervals.
What funding is
If funding is positive, longs pay shorts. If negative, shorts pay longs. Rates and intervals are published by the exchange.
Why funding matters
Large notional size and long holding periods make small rates add up quickly.
Funding vs trading fees
Fees are paid on entry and exit. Funding is paid repeatedly while you hold.
Tools: