How it works
Funding keeps the perpetual price close to spot. When the rate is positive, longs pay shorts. When it is negative, shorts pay longs. It is charged on the full notional value, not on your margin, so leverage magnifies it.
A rate of 0.01% every 8 hours looks small, yet it adds up to about 11% a year on notional. During euphoric markets rates can be ten times higher, which quietly drains long positions held for weeks.
Formulas
- Payments = Hold time ÷ Funding interval (rounded down)
- Per payment = Notional × Rate
- Total = Per payment × Payments (negative = you pay)
- Annualised = Rate × (8760 ÷ interval hours)
Questions traders ask
When is funding charged?
Most exchanges settle every 8 hours (00:00, 08:00, 16:00 UTC); some pairs use 4h or 1h. You only pay or receive if you hold the position at the settlement moment.
Is funding included in my PnL?
Exchanges usually book it separately from realised PnL, which is why your trade can look green while your wallet balance is lower than expected.