Did you know that holding contracts for a long time incurs costs?

These costs primarily come from the funding rate, which can be understood as a daily fluctuating "tip." Its changes depend on the balance of power between longs and shorts in the market and are displayed in the upper right corner of the order book. Typically, the initial rate is 0.01%, but it adjusts dynamically based on market conditions.

Funding Rate Settlement Rules

1. Settlement Times: Three times a day—at midnight, 8 AM, and 4 PM. Fees will only be settled if positions are still held at these three times.

2. Impact of Positive and Negative Rates:

• Positive rate (e.g., 0.01%):

• Holding long positions: Fees must be paid.

• Holding short positions: Fees can be collected.

• Negative rate:

• Holding short positions: Fees must be paid.

• Holding long positions: Fees can be collected.

3. Source of Fees:

Fees are paid between longs and shorts in the market, calculated by "position value × funding rate."

Reminder for Long-Term Holding

If you plan to hold contracts for a long time, the accumulated funding rate may become a significant expense. Understanding and controlling the duration of your position is essential for effective cost management.

Therefore, if you intend to hold long-term, consider focusing on the primary market where you do not need to pay the funding rate. For example, I am currently positioned in Marvin, a concept driven by Musk that has strengthened the community, with a floating profit of 7 times.