Enter your position size, funding rate, and hold duration. See the exact cost of carrying a perpetual futures position over time.
Perpetual futures are the dominant instrument in crypto derivatives markets, with daily volume regularly exceeding $50 billion. Unlike quarterly futures that expire, perpetuals never settle — which requires a mechanism to keep their price anchored to the underlying spot market. That mechanism is the funding rate.
Every 8 hours, a percentage of your total position value is either deducted from or added to your account. This percentage is the funding rate — typically around 0.01% per interval during calm markets, but capable of spiking to 0.1% or higher during periods of extreme bullish sentiment. At 0.1% per 8 hours, you are paying 0.3% of your position per day — roughly 109% annualized.
When the perpetual futures price exceeds the spot price (indicating more buyers than sellers), the funding rate turns positive. Longs pay shorts to compensate them for being on the opposite side of a losing trade. This makes holding longs more expensive, discouraging further buying pressure, and pays shorts to maintain their positions, increasing selling pressure. The combined effect pulls the perpetual price back toward spot.
The funding rate itself is calculated from the premium index — the average difference between the perpetual mark price and the spot price over the past 8 hours. Exchanges cap the rate to prevent extreme payments; Binance caps funding at 0.75% per 8 hours in either direction.
For day traders and scalpers who close positions within a few hours, funding is rarely a meaningful cost. The real impact falls on swing traders and position traders who hold leveraged futures for days or weeks. A $100,000 long in a 0.05% funding environment pays $150 every 8 hours — $450 per day, $3,150 per week. Over a month-long hold, funding alone costs over $13,000.
This is why some traders deliberately shift to spot when holding for longer timeframes, or actively monitor the screener for coins with unusually low or negative funding rates before taking a position.
Beyond the direct cost, funding rate is one of the most reliable real-time measures of market sentiment. Persistently high positive funding signals an overcrowded long trade — historically correlated with local price tops. Extended negative funding signals that retail has capitulated to the short side — historically correlated with bottoms and squeeze events.
Tracking funding rates across multiple assets in real time gives a clearer picture of positioning than any single price chart alone.
Monitor funding rates across all pairs in the screener →