Funding Rate Calculator
Calculate the cost of holding a perpetual futures position based on the funding rate.
Formula
This is the amount paid or received each funding interval. If you're long and the rate is positive, you pay. If you're short, you receive (and vice versa).
8,760 = hours in a year. Most exchanges use 8-hour intervals (3 payments per day = 1,095 per year).
Examples
- Position Size = $50,000
- Funding Rate = 0.01% per 8 hours
- Payment per interval = $50,000 × 0.0001 = $5.00
- Daily cost = $5.00 × 3 = $15.00
- Annual cost = $5.00 × 1,095 = $5,475
- Position Size = $10,000
- Funding Rate = −0.005% (negative = shorts pay)
- Payment per interval = $10,000 × 0.00005 = $0.50 (you pay)
- Daily cost = $0.50 × 3 = $1.50
- Annual cost = $0.50 × 1,095 = $547.50
- Position Size = $100,000
- Funding Rate = 0.03% per 1 hour
- Payment per interval = $100,000 × 0.0003 = $30
- Daily cost = $30 × 24 = $720
- Annual cost = $30 × 8,760 = $262,800
Key Concepts
What is a Funding Rate?
Funding rates are periodic payments between long and short traders on perpetual futures. They keep the perpetual price anchored to the spot price. When positive, longs pay shorts; when negative, shorts pay longs.
Funding Intervals
Most centralized exchanges settle funding every 8 hours (00:00, 08:00, 16:00 UTC). Some DEXs use 1-hour or continuous funding. The interval directly affects how often you pay or receive funding.
Positive vs Negative Rates
Positive funding means longs pay shorts — the market is bullish and traders are willing to pay to hold longs. Negative funding means shorts pay longs — the market is bearish or there's excess short interest.
Impact on Position Cost
Even a small funding rate like 0.01% compounds significantly over time. At 3 payments per day, that's 0.03% daily or roughly 11% annually. High funding rates can erode profits from otherwise winning trades.
Funding Rate Arbitrage
Traders exploit funding rate differences between exchanges by going long on the exchange with lower rates and short on the one with higher rates, earning the spread as profit while remaining market-neutral.
How Exchanges Calculate Rates
Funding rates are typically derived from the premium/discount of the perpetual price vs spot price, plus an interest rate component. Each exchange has its own formula, but the result is similar: a percentage applied to position size.
How Funding Rate Costs Work
Perpetual futures don't expire like traditional futures, so exchanges use funding rates to keep their price aligned with the spot market. Every funding interval, one side of the trade pays the other based on the current rate and position size.
The cost can be substantial for larger positions or during volatile markets when funding rates spike. During bull runs, funding rates on major coins can reach 0.1% or more per 8 hours, which translates to over 13% annualized — effectively a significant tax on holding leveraged longs.
Monitoring funding costs is essential for any position held longer than a few hours. Many profitable-looking trades become losers once funding is factored in, especially during extended periods of elevated rates.
Frequently Asked Questions
Do I always pay funding?
No — you only pay when you're on the paying side. If you're long and the rate is positive, you pay. If you're long and the rate is negative, you receive funding. Shorts are the mirror: they pay when rates are negative and receive when positive.
Is funding charged on my margin or position size?
Funding is always calculated on the full notional position size, not your margin. A $10,000 position at 10x leverage (with $1,000 margin) pays funding on the full $10,000.
Can funding rates change?
Yes — funding rates update every interval based on market conditions. The rate shown is for the current interval only. Future rates may be higher or lower depending on market sentiment and the premium between perpetual and spot prices.
What's a typical funding rate?
On major exchanges, funding rates for BTC and ETH typically range from −0.01% to +0.03% per 8 hours during normal conditions. During extreme market moves, rates can spike to 0.1% or higher.