$RARE Opening a long position with a negative funding rate in the context of cryptocurrency or futures trading can be an interesting strategy.
Negative Funding Rate:
This means that short positions are paying long positions. If you're in a long position, you'll receive payments from those holding short positions as long as the funding rate remains negative.
This typically happens when the perpetual futures price is trading below the spot price.
#Advantages Income from Funding: Since the shorts are paying the longs, you earn an additional income for holding the position, reducing your cost to carry the long.
#Risks Reversal of Funding Rate:
Funding rates fluctuate, so a negative rate can turn positive, meaning you might start paying to maintain the position.
Be sure to have risk management strategies in place, such as setting stop losses, to protect against adverse price movements.
Would you like any specific help with managing the trade?