WHAT IS FUNDING FEES IN FUTURES TRADING?
Ever wondered how perpetual futures stay aligned with the spot market price? Enter the FUNDING FEES!
How it works?
Funding fee is a periodic payment between long and short position holders, based on the funding rate.
- If the funding rate is positive, longs pay shorts.
- If the rate is negative, shorts pay longs.
When is it charged?
It happens every 8 hours (or as per your exchange’s interval). The fee is either deducted from your futures wallet or added to it, depending on your position.
Example... You hold a $10,000 long position.
- If the funding rate is 0.01%, you'll pay $1.
- If it's negative, you'll earn $1 instead.
⚠️ PRO TIP: Always keep an eye on the funding rate in your futures trading dashboard. It directly impacts your PNL.
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