Funding costs,calculated.
How much of your margin do perpetual funding payments eat per day, week and month — at your leverage, with live rates.
What is a funding rate?
Perpetual futures never expire, so exchanges need a mechanism to keep the contract price anchored to the spot index: funding. Every interval, traders on one side of the market pay traders on the other. When the rate is positive the contract trades rich and longs pay shorts; when negative, shorts pay longs. The rate looks tiny — 0.01% is typical — which is exactly why its real cost is underestimated.
The math that eats your margin
Funding is charged on your notional position (margin × leverage) but paid out of your margin. That's the trap: at 10x leverage, a 0.01% rate per 8-hour interval costs 0.1% of notional — which is 0.3% of your margin every day, roughly 2.1% a week and 9% a month, before the price moves a cent. At 50x the same "tiny" rate consumes 1.5% of margin daily. Funding alone can erode a position to liquidation if you hold long enough.
How to keep funding costs down
Use lower leverage — the cost scales linearly with it. Check the live rate before entering, not after; avoid holding through extreme spikes (rates can hit ±0.3% per interval in overheated markets); and remember the other side of the trade: when the crowd pays a heavy premium to be long, shorts are being paid to wait.
Frequently Asked Questions
What is a funding rate?
A periodic payment between long and short traders that keeps a perpetual contract's price anchored to the spot index. Perps have no expiry, so funding is the mechanism that pulls the contract back toward the underlying price.
Who pays whom?
When the rate is positive (the contract trades above the index), longs pay shorts. When it's negative, shorts pay longs. You only pay or receive if you hold the position at the funding timestamp.
How often is funding charged?
Every 8 hours on Binance and Bybit perpetuals (00:00, 08:00 and 16:00 UTC) — three times a day. Some venues use 1-hour or 4-hour intervals, so always check the contract specifications.
Why does funding eat margin so fast at high leverage?
Funding is charged on notional (margin × leverage) but paid from your margin. At 20x, a 0.01% rate costs 0.2% of margin per interval — 0.6% a day and roughly 18% a month, before the market moves at all.
What does a negative funding rate mean for me?
If you are short, you pay; if you are long, you receive. Persistently negative funding usually signals bearish positioning and can make patient long positions cheaper to hold.
How can I reduce funding costs?
Use lower leverage, avoid holding through extreme rate spikes, compare venues, and check the live rate before entry — or take the other side when the crowd is paying a premium.