Futures funding rate: what it is and what it costs
For a week the position has been green on price, yet the account result is red. The money went where people look least: funding. On a single trade it's invisible, but on a position held for weeks — and especially on a futures grid — it can take a noticeable share of the profit.
Why funding exists
A perpetual future has no expiry date, so its price can drift away from the spot price. Funding pulls it back: if the future trades above spot and there are more longs, longs pay shorts. If it trades below — shorts pay longs. The exchange takes no fee from this: the money moves between traders.
How the payment is calculated
Position value is size times price, including leverage, not your margin. The rate is announced in advance and charged at fixed times — on major exchanges usually every 8 hours, more often on some contracts. Check the schedule and the current rate on your exchange's contract page.
Calculated at a constant rate of 0.01% paid every 8 hours — for illustration. In reality the rate changes and can be several times higher.
90 USDT a month is 0.9% of the position. If the strategy makes 2% a month, funding takes almost half of it.
Funding is charged on the whole leveraged position, not on your margin.
When funding matters most
- Long holds. A one-to-two-week swing in an overheated market can give more to funding than to entry and exit fees.
- Futures grids. The bot holds its accumulated position constantly, and funding runs the whole time it's open. It's not in Grid Profit — more in the article on a grid bot's real result.
- Positions against the crowd work in your favour: in a strong rally, when there are many longs, shorts receive funding.
Funding as a signal
A very high positive rate means the market holds many leveraged longs. It's not a reversal forecast, but a sign of overheating: such a crowd is vulnerable to a sharp move down and a cascade of liquidations. Rate differences between exchanges sometimes open funding arbitrage opportunities — with their own execution risks.
Cheat sheet: before a long futures hold
One button adds these points to your pre-entry checklist — it will appear in every trade in the journal.
- Current funding rate checkedOn your exchange's contract page.
- Funding calculated for the whole holding periodPosition value × rate × number of periods.
- Funding doesn't eat the trade's targetIf it eats a noticeable part — reconsider the holding period or the side.
How to account for funding in your journal
If a trade's result is counted as “exit minus entry”, funding gets lost — and a losing long-term strategy looks profitable. It has to be deducted from every trade just like a fee.
Ordo Trade pulls funding from the exchange together with trades and includes it in the result of every position and every bot. The market section shows funding by exchange and arbitrage yield.
In short: frequently asked questions
What is the funding rate on futures?
A periodic payment between holders of longs and shorts on a perpetual future. It keeps the futures price close to the spot price.
How often is funding charged?
On major exchanges usually every 8 hours, more often on some contracts. The exact schedule is shown on the contract page.
Is funding charged on the margin or on the whole position?
On the value of the whole position including leverage. That's why with high leverage funding is noticeably larger relative to your margin.
