💬 **What is funding?**

**Funding** is a tool for aligning futures prices with the spot price. Funding has a **funding rate**, it can be positive or negative - it depends on the ratio of long and short positions for a particular coin.

🔻**Shorts** > longs - negative rate

🔻**Longs** > shorts - the rate is positive

👉 With a **negative** rate, there are more **shorts** than longs - so the commission will be debited from traders in short positions and awarded to long traders. With a positive rate the opposite is true. That is, for every long position there is a short position, and market participants earn from each other’s losses 🤷

*Typically the funding rate is charged and credited every 8 hours (3 times a day).*

❗️The financing rate is an **important indicator** when analyzing the chart and choosing the entry price for a deal. But remember that if the majority of traders are shorting, this does not mean that the price will go down 100%. In crowds, as a rule, people lose money rather than earn money 👀