What Are Funding Rates?
Funding rates are periodic payments exchanged between traders holding long and short positions on perpetual futures contracts . Unlike traditional futures that expire on a set date, perpetual contracts have no expiry — so exchanges use funding rates to keep the contract price aligned with the underlying spot price.
When the funding rate is positive , longs pay shorts — indicating bullish sentiment and that the futures price is trading above spot. When it's negative , shorts pay longs — signaling bearish pressure.
On Binance, funding is settled every 8 hours (00:00, 08:00, 16:00 UTC). You only pay or receive funding if you hold a position at the exact settlement time.