Preconditions
You already hold any perpetual contract position on a crypto exchange.
You can distinguish between entry price, mark price and index price (mark price is used to calculate PnL and trigger liquidation, index price is the weighted average price from a basket of spot exchanges).
A positive funding rate only requires you to pay fees if you still hold the position at the settlement timestamp — you do not need to pay if you close the position in advance.
Funding rate is a regular cash flow exchange between long and short holders of perpetual contracts, designed to pull the contract price back in line with the spot index price. The positive or negative value of the rate is determined by the premium or discount of the contract price relative to the spot price, and the platform only acts as a matching party, no service fee is charged for this process.
Step 1: Locate the funding rate and settlement time for your held contract
[What to do]: Check the current funding rate value of the target contract and the next upcoming settlement timestamp on the trading page.
[How to do it]: Open the exchange's perpetual contract trading interface, you can usually find the "Funding Rate" and "Time to Next Settlement" fields below the K-line chart or in the "Contract Info" section.
Scenario A: Positive funding rate (e.g. +0.01%) → It means the contract price is higher than the spot index, so long position holders need to pay funding fees to short position holders. Scenario B: Negative funding rate (e.g. -0.01%) → It means the contract price is lower than the spot index, so short position holders need to pay fees to long position holders.
Completion Check: Clearly record the current funding rate value and the next settlement timestamp. The mainstream settlement schedule runs 3 times a day at 00:00, 08:00, 16:00 (UTC+8).
Step 2: Confirm whether you "need to pay the fee" at settlement
[What to do]: Verify if your held position is still active at settlement — the rule is simple: you only pay the fee if you hold the position at the exact settlement timestamp, no fee is charged if you closed the position beforehand.
[How to do it]: Check the "Time to Next Settlement" countdown displayed by the system.
Scenario A: You still hold the position when the settlement timestamp arrives→ Fee is required. The system will automatically deduct the funding fee from your account per the formula: Funding Fee = Notional Position Value × Funding Rate. Under a positive funding rate, the fee is paid by longs to shorts. Scenario B: You have fully closed the position before the settlement timestamp arrives→ No fee is required. Regardless of whether the funding rate is positive or negative, no funding fee will be generated as long as you have no open position at settlement.
Completion Check: Check your account fund transaction history within 5 minutes before and after the scheduled settlement time (e.g. 08:00 UTC+8) to confirm if any funding fee deduction or income record appears.
High Risk Alert
Funding rate settlement has an approximate 1-minute deviation window. If you open a position right at the settlement critical point (for example, 07:59:30), you may still be counted as holding a position at settlement and required to pay the funding fee. Trying to close your position at the very last second to save funding fees may result in the system charging you based on your position size at settlement — this is not a platform commission, it is real funds paid directly to your counterparty. Funding fee deductions may directly cause insufficient margin to trigger liquidation, especially under the isolated margin mode.
Step 3: Calculate the exact amount to pay — do the math before deciding to hold positions past settlement
[What to do]: Calculate the exact funding fee amount, and judge if this cost is worth paying.
[How to do it]: Find the "notional position value" (for USDT-margined contracts: number of contracts × mark price), then multiply it by the current funding rate.
Example: You hold a long position of 10 BTCUSDT perpetual contracts, the current mark price is 60,000 USDT, and the funding rate is +0.05%. Notional position value = 10 × 60,000 = 600,000 USDT, Funding Fee = 600,000 × 0.05% = 300 USDT.
Scenario A: The calculated fee ≤ the expected floating profit during your holding period→ The cost is acceptable, you can keep holding the position. Scenario B: The calculated fee is higher than your expected floating profit, or exceeds your risk tolerance→ Consider closing the position before settlement, or reduce your position size to lower the total notional value.
Completion Check: You get a specific USDT amount, and make a clear decision on whether to hold the position past the settlement timestamp based on that number.
Common Causes of Miscalculation
Many traders mistakenly believe funding fee settlement "is deducted immediately when you open a position, just like a regular trading fee". In reality, funding fees only apply to traders who still hold their positions at the exact settlement timestamp. Another common misconception is that "long positions always get charged when the funding rate is positive" — it is not "every time you go long", it is "every settlement cycle". If you open a long position after the 08:00 settlement, there are 8 hours left until the 16:00 settlement, the funding rate for that 8-hour window is calculated at the current value, and you only need to pay the fee if you still hold the position at 16:00. Frequent opening and closing of positions within a settlement cycle will never trigger a funding fee, only the position status at the exact settlement moment determines if you are charged.
Operation Completion Verification
10 minutes after the scheduled settlement time, open the "Funding History" or "Transaction Record" section on your exchange, check if there is a funding fee deduction or income entry. The entry will be clearly marked as "Funding Fee" with the exact amount. If no such record exists, that means you did not hold any open position at settlement.
Notes for Holding Positions Past Settlement
If you choose to hold your position past the settlement timestamp, make sure you reserve sufficient margin balance in your account — funding fees are deducted directly from your margin at settlement, which may lower your margin ratio. If the margin ratio drops below the maintenance margin level after the deduction, the system will trigger a forced liquidation. Verification method: Go to the "Assets" section on the contract page, confirm that your "Available Balance" does not turn negative after settlement.
