# Funding Rate ## Funding Rate **Funding rate** is a periodic payment between traders in the perpetual futures market. Funding helps keep the futures price close to the spot price of the underlying asset. *** ### How Funding Works **Positive rate (funding > 0):** * Futures price is above spot price * Long traders pay short traders * Encourages closing longs and opening shorts **Negative rate (funding < 0):** * Futures price is below spot price * Short traders pay long traders * Encourages closing shorts and opening longs **Zero rate (funding = 0):** * Futures price equals spot price * No payments between traders *** ### Calculation Examples #### Positive Funding Rate = 0.01%, long position of 10,000 USDT You pay: 10,000 × 0.01% = 1 USDT #### Negative Funding Rate = -0.01%, long position of 10,000 USDT You receive: 10,000 × 0.01% = 1 USDT *** ### Payment Schedule **Schedule depends on the exchange and asset:** Payment frequency varies — most commonly every 8 hours, but intervals of 4 hours and even 2 hours also occur. Payment time and frequency are determined by the exchange and may differ for different trading instruments. **Important:** * Funding is paid only if the position is open at the time of payment * If you close the position before payment — you neither pay nor receive funding * Debited/credited automatically * Always check the schedule for the specific exchange and asset *** ### What Affects Funding Size **Price Difference:** Futures more expensive than spot → high positive funding Futures cheaper than spot → high negative funding **Market Sentiment:** Bull market (growth) → funding is usually positive Bear market (decline) → funding may be negative **Volatility:** High volatility → funding changes sharply Low volatility → funding is stable, close to zero *** ### How to Use Funding Information #### For Short-Term Trading **High positive funding (0.1% or higher):** Expensive to hold longs, many traders in longs (possible overheating), potentially profitable to open shorts. **High negative funding (-0.1% or lower):** Expensive to hold shorts, many traders in shorts (possible overselling), potentially profitable to open longs. #### For Medium-Term Positions When holding for several days, consider accumulated funding (3 payments per day × number of days). **Example:** Funding = 0.05% every 8 hours Per day: 0.05% × 3 = 0.15% For 10 days: 1.5% of position size *** ### Where to Check Funding in MoonTrader **In the "Markets Overview" tab:** * "Funding Rate" column shows the current rate for each instrument * You can compare funding across different trading pairs * Convenient for choosing an instrument with funding considerations **On the chart:** * There's an indicator to display the funding rate **Funding on exchanges:** * [Binance Funding Rate](https://binance.com/en-IN/futures/funding-history/perpetual/real-time-funding-rate) * [Bybit Funding Rate](https://bybit.com/en/announcement-info/fund-rate/) * [OKX Funding Rate](https://okx.com/trade-market/funding/swap) --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://guide.moontrader.com/en-moontrader-docs/market-concepts/funding-rate.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.