Funding Rates Explained
Learn how funding payments affect long and short traders in perpetual futures.
Why funding exists
Perpetual futures have no fixed expiry. Funding is a periodic payment between position holders that helps connect the perpetual market with its reference price. Positive funding generally means longs pay shorts; negative funding reverses that flow. The contract determines timing and calculation details.
Payment example
At a +0.01% rate, a 1,000 USDT long has an estimated 0.10 USDT payment for one eligible settlement. If rate and notional remain unchanged for three settlements, the total is 0.30 USDT. This is separate from entry and exit trading fees.
Avoid extrapolating a snapshot
Do not treat a displayed rate as a fixed daily yield or assume every contract settles every eight hours. Rates, intervals and position value can change. Check the next settlement time and whether the quoted rate is estimated or already settled.
Calculate a signed funding estimate
Hypothetical worked example. For hypothetical notional of 2,000 USDT and a constant funding rate of +0.01% over three settlements, the estimate is 2,000 × 0.0001 × 3 = 0.60 USDT. In the calculator a positive cost means paying; the equivalent short position receives 0.60 under this convention.
Why can the exchange total differ?
The calculator assumes constant notional and rate. Actual settlement eligibility, interval, rate and position value can change. Inspect the contract’s exchange schedule; funding is not a component of the FuturesRadar score.
Verify the assumptions
Check the input window, fees and data availability before applying this example. For the exact software behavior and coverage limits, read the scanner methodology. Examples explain arithmetic and interpretation; they are not historical performance claims.