What is the funding rate: who pays and how it is calculated
The funding rate is the rate of the periodic payment between longs and shorts on a perpetual contract. It keeps the perpetual price close to spot. When it is positive, longs pay shorts. When it is negative, shorts pay longs.
Funding rates
Live example
- Current period rate
- Long 10,000 USDT
- Short 10,000 USDT
Converted at the current rate, not a return
Highest funding rates
View funding rate ranking| Coin | Exchange | 8h rate | Current period rate | Funding interval | Next settlement |
|---|---|---|---|---|---|
Data as of
Lowest funding rates
Positive funding rate: who pays whom
When the rate is positive, longs pay shorts. It is usually positive when the perpetual trades above spot and longs outnumber shorts: holding a long costs money and holding a short collects it, which pulls the perpetual price back toward spot.
Negative funding rate: who pays
When the rate is negative, shorts pay longs. It is usually negative when the perpetual trades below spot and shorts outnumber longs.
How funding is calculated
Each period’s funding fee is the position’s notional value times that period’s rate. Most exchanges measure notional value at the Mark price, and leverage does not change it. You pay or receive a period only if you still hold the position at the settlement time. A position closed before settlement takes no part in it.
Each exchange sets the rate itself. Most take the perpetual’s average premium over the Index price across a window, add an interest component (commonly 0.01% per 8 hours) and clamp the result to a per-period cap. While the premium is small, the rate equals the interest component, which is why many exchanges sit at 0.01% per 8 hours. The rate shown before settlement is live. It moves with the market and is fixed only at the settlement time.
Is a negative funding rate bullish or bearish?
The rate alone cannot tell you. A negative rate means the perpetual trades below spot and shorts outnumber longs right now: it describes current positioning. When shorts are crowded, a rise can force them to close and speed the move up. In a downtrend the rate can stay negative for a long time.
Settlement periods
Venues settle on different schedules, commonly every 8, 4 or 1 hours, and some cap the rate per period. 0.01% every hour is eight times 0.01% every 8 hours, so convert rates to the same period before comparing them. See How often funding settles and how to annualize it.
Annualized and cumulative
An annualized figure assumes one period’s rate stays fixed, while rates change every period. The funding fee summed over several days reflects what was actually paid.
Trading the funding diff
When two markets have different funding rates, a hedged position across both legs collects the difference: short where the rate is higher, long where it is lower. Funding rate arbitrage covers how it works and its risks.
Data in Z Market Lab
The Funding rates page lists every coin across venues at its native period or converted to a common one, with cumulative funding, rate caps and settlement history. Each coin also has its own funding rate page with every exchange’s current rate and its history.