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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