What is a funding rate?
A funding rate is a small periodic payment exchanged directly between traders holding long and short positions on a perpetual futures contract. Unlike traditional futures, perpetuals never expire — so there's no settlement date to pull the contract price back to spot. Funding is the mechanism that does that job instead: it nudges traders to take the side that closes the gap between the perpetual price and the underlying spot price.
The payment doesn't go to the exchange. It moves between traders. When funding is positive, longs pay shorts; when it's negative, shorts pay longs. This calculator tells you which side of that flow you're on, and exactly how much it costs — or earns — you over the time you plan to hold.
How to use it
- Choose Long or Short. Your side decides whether you pay or receive at a given rate.
- Enter your position size — the full notional value (margin × leverage), since funding is charged on the whole position, not just your collateral.
- Enter the funding rate per interval as a percentage. Positive means longs pay; type a negative number to model a market where shorts pay.
- Set the funding interval (usually 8 hours) and your holding time in hours.
- Read your total funding, the per-interval and per-day amounts, the percentage of your position, and whether you pay or receive.
The exact formula
Funding maths is simple once you separate "how much per interval" from "how many intervals":
The sign — whether it's a cost or a credit — depends on two things together: the sign of the rate, and your side. Longs pay when the rate is positive and receive when it's negative; shorts are the mirror image. So a long at a +0.01% rate pays, while a short at the same rate receives. The calculator shows a paid amount in red with a "−" and a received amount in lime with a "+".
Worked example
Take the calculator's defaults: a $10,000 long position, a funding rate of 0.01% per interval, an 8-hour interval, held for 24 hours. Funding per interval = 10,000 × (0.01 ÷ 100) = $1.00. Over 24 hours there are 24 ÷ 8 = 3 intervals, so total funding = 1.00 × 3 = $3.00. Because the rate is positive and you're long, you pay it — the result shows −$3.00. That's −$3.00 per day and just 0.03% of your position over the day. Small here, but on a larger position held for a week it compounds into a meaningful drag, which is why traders check it before holding through multiple funding windows.
When and why traders use it
Funding matters most for positions held across one or more funding timestamps. A scalper in and out within minutes rarely pays any funding; a swing trader holding a leveraged long for several days can hand over a real slice of their position in funding alone. Traders use this calculator to decide whether a directional thesis is worth the carry, to size that carry into their expected profit, and — on the other side — to spot when the receiving side is attractive enough to run a funding-capture or delta-neutral strategy that collects payments while hedging price risk.
Common mistakes
- Using margin instead of notional. Funding is charged on your full position size, not your collateral. A $1,000 margin at 10× pays funding on $10,000.
- Getting the side backwards. A positive rate means longs pay. It's easy to assume "positive = I earn" — but that only holds if you're short.
- Treating the rate as fixed. Funding resets every interval and can swing with sentiment. This tool assumes a constant rate, so a held position's real cost can be higher or lower than the estimate.
- Forgetting you only pay if you're holding at the timestamp. Closing before the funding mark means you skip that interval's payment entirely.
From calculator to exchange
Every major derivatives venue publishes its current and historical funding rates, usually next to the order ticket, and most settle every 8 hours. Plug a venue's live rate into the field above to model your real carry before you commit. Because rates differ between exchanges — and can flip sign during volatile moves — trading on a platform with transparent, frequently updated funding data and deep liquidity keeps your real cost closest to the figure above and helps you spot the moments when being on the receiving side actually pays.