Earning money on funding in the context of cryptocurrency markets is most often associated with trading on futures with a perpetual contract, where a funding fee is charged. This fee is a kind of commission that is paid either by long or short positions, depending on market conditions. If you want to earn money on funding, here is a detailed guide:

1. Understanding Funding

Funding is a mechanism used in futures markets without an expiration date to keep the futures price close to the spot price of the asset.

Positive funding means that longs are paying shorts, while negative funding means that shorts are paying longs.

Funding occurs at certain intervals (for example, every 8 hours), and rates may change.

2. Selecting a trading platform

First, you need to choose a platform that supports trading futures with a permanent contract (for example, Binance, Bybit, OKX). Check on it:

Frequency of funding payments.

Historical funding rates for different trading pairs.

3. Analysis of market conditions

When the rate is positive, it means that there is more demand for longs than shorts, and long positions pay shorts.

When the rate is negative, the situation is reversed - shorts pay longs.

Your goal is to open positions on the side that will receive funding.

4. Opening a position

Opening shorts (if funding is positive): If funding is positive, open a short position. You will receive payment from the longs.

Going Long (When Funding Is Negative): If funding is negative, go long and you will be paid from the shorts.

5. Risk management

Funding is not a guaranteed income, as the market may move against your position and you will suffer losses. Therefore, it is important to:

Use stop loss.

Trade small volumes to minimize losses from price changes.

Monitor funding rates regularly for changes.

6. Example of strategy

1. Monitor funding rates. For example, the Bybit platform has information about future funding rates.

2. Open a short position when the funding rate is positive (for example, +0.01%).

3. If the market moves in your direction or remains stable, you will receive payments every 8 hours.

4. When the funding rate changes, either close the position or adjust it to minimize losses.

7. Additional recommendations

Study historical funding rate data to understand trends.

Don't rely on funding alone: ​​combine this strategy with other trading approaches (e.g. arbitrage or hedging).

Funding can be a profitable strategy, but requires careful analysis of market conditions and risk management to ensure that potential losses from price movements do not exceed the earnings from funded payments.