Perpetual Funding Cost Estimator
Estimate total funding costs over a holding period based on average historical funding rates.
Formula
Where r_avg is the average funding rate per interval. Multiply by the number of intervals in your holding period.
Examples
- Intervals in 30 days = 30 × 3 = 90
- Total rate = 0.01% × 90 = 0.9%
- Total cost = $100,000 × 0.009 = $900
- At 10× leverage ($10K margin): cost = 9% of margin
- Negative rate = shorts pay
- Intervals = 7 × 3 = 21
- Total rate = 0.005% × 21 = 0.105%
- Total cost = $25,000 × 0.00105 = $26.25
- Intervals = 90 × 3 = 270
- Total rate = 0.03% × 270 = 8.1%
- Total cost = $50,000 × 0.081 = $4,050
- At 5× leverage ($10K margin): cost = 40.5% of margin
Key Concepts
Why Estimate Funding Costs?
Before holding a perpetual position for days or weeks, you should estimate the funding drag. A position that looks profitable on price alone might be a net loser once cumulative funding is subtracted.
Average vs Actual Rates
This estimator uses an average rate. In reality, rates fluctuate every interval. Use this as a rough guide — actual costs could be higher or lower depending on market conditions during your hold.
Historical Rate Sources
Check the funding rate history on your exchange or use aggregators like Loris Tools to see historical average rates. Use the median or 30-day average for a realistic estimate.
Funding Compounds Against You
Each funding payment reduces your margin. Over time, this increases your effective leverage and brings your liquidation price closer. Factor this into your risk management.
Positive vs Negative Scenarios
If you're on the receiving side of funding, it's income — not a cost. Short positions during high positive funding periods actually earn money from funding.
Break-Even Impact
Add the estimated total funding cost percentage to your break-even calculation. A 1% funding cost means the market needs to move 1% more in your favor before you start profiting.
Estimating Perpetual Futures Holding Costs
Perpetual futures have no expiry, but they're not free to hold. Funding rates act as a recurring cost (or income) that accumulates over time. This estimator helps you project that cost before entering a trade.
The key input is the average funding rate. You can use the current rate as a starting point, but for longer holds (weeks+), the 30-day historical average is more representative. Rates can swing dramatically during market shifts.
For high-conviction directional trades held over weeks, funding costs can easily reach 3-10% of position size. This is why many swing traders prefer spot or traditional futures over perpetuals for longer timeframes.
Frequently Asked Questions
Should I use the current rate or historical average?
For holds under 24 hours, the current rate is fine. For multi-day holds, use the 7-30 day average. For very long holds (weeks+), consider that rates tend to revert toward 0.01% over time.
Does this account for rate changes?
No — this uses a flat average rate. In reality, rates change every 1-8 hours. During market volatility, rates can spike to 10-100× their average. This estimate is a baseline, not a guarantee.
How does this affect my PnL?
Subtract the estimated funding cost from your expected profit. If you expect a 5% price move and funding costs 2%, your net profit is only 3%. At high leverage, the margin impact is even larger.