Opening a position without checking the funding rate is like driving without looking at the fuel gauge—you only find out the cost after you start. Especially for your first order, do not just stare at the candlesticks. First understand how to check and calculate the funding fee.
The world's largest cryptocurrency exchange by trading volume,leading in security and liquidity.
New user benefit: Enjoy 20% off trading fees upon registration!
What Is the Funding Fee? Simple Explanation
It is not a fee charged by the exchange. It is a 'balancing payment' between long and short traders. When the rate is positive, longs pay shorts. When it is negative, shorts pay longs. It is settled every 8 hours (UTC 00:00, 08:00, 16:00, or 08:00, 16:00, 00:00 in UTC+8).
Key point: You only pay or receive the fee if you still hold the position at settlement time. If you close before settlement, you pay nothing.
Step 1: Find the Funding Rate Before Opening
What to do: Check the current funding rate and the next settlement time.
How to do it on web: Go to the futures trading page (for example, BTCUSDT perpetual). Look on the right side of the K-line chart. There is a 'Funding Rate' label showing the current rate and a countdown timer. Click it to see historical funding rates.
How to do it on the app: On the futures trading screen, the funding rate is usually shown near the trading pair name at the top. The settlement countdown is also easy to see.
Completion standard: You clearly see a number like '+0.01%' or '-0.02%' and a timer like 'next settlement in X hours X minutes'.
Step 2: Calculate How Much the Order Will Be Charged
The formula is simple, but do not skip it. Calculate clearly before placing an order.
Funding fee = position value × funding rate Position value = entry price × contract quantity = margin × leverage
Example: You use 100 USDT as margin with 20x leverage, so your position value is 2,000 USDT. If the current funding rate is +0.01% (longs pay shorts) and you open a long position, each settlement costs: 2,000 × 0.01% = 0.2 USDT
That may not look like much, but if it settles 3 times a day and you hold for a week, it is about 4.2 USDT—about 4.2% of your margin. And in extreme cases, rates can spike to -0.5% or even higher.
Step 3: Include the Funding Fee in Your Profit and Loss
How to do it: When placing an order, look at 'estimated PnL' or 'entry cost after opening'. It usually already includes trading fees, but it does not include the funding fee. You need to keep that in mind yourself.
Common mistake: Beginners often focus only on price movement to calculate profit and forget the fees deducted every day. After holding for a few days, the price may not have fallen, but the account balance is lower. This is especially true when shorting during negative funding rates—shorts have to pay, and the cost can be even heavier.
Risk Reminder: A High Funding Rate Does Not Mean the Price Will Fall
Many people see an extremely high funding rate (for example -2.5%) and think, 'Short sentiment is too crowded, so it should reverse,' then rush in to long and earn funding fees. But remember, extreme negative rates often happen when the price is falling sharply. You may not earn the funding fee before the price moves against you and liquidates you. In hedge mode, long and short funding fees can partly offset each other, but they are not fully canceled out. Long-term locked positions still carry costs.
The world's largest cryptocurrency exchange by trading volume,leading in security and liquidity.
New user benefit: Enjoy 20% off trading fees upon registration!
How to Verify After Opening
After your order is filled, go to Futures → Positions. Check whether your position shows a 'funding rate' or 'estimated fee'. If it does, you are in the funding settlement cycle. Go to Today's Realized PnL → Funding Fees and Trading Fees to see how much was deducted at each settlement.
