$ERA ｜Funding Rate -0.16%｜Shorts pay
What is the funding rate? Perpetual contracts have no expiry date. The funding rate helps keep the contract price close to the spot price: longs and shorts pay each other a fee at regular intervals.
Deeply negative funding rates are sometimes seen when short positions are crowded. A short squeeze is a commonly cited risk, but it’s only one possibility.
The point of understanding this metric is to be less alarmed by the numbers, not to use it to predict market tops or bottoms.
Markets change quickly, so make your own decisions.
What is the funding rate? Perpetual contracts have no expiry date. The funding rate helps keep the contract price close to the spot price: longs and shorts pay each other a fee at regular intervals.
Deeply negative funding rates are sometimes seen when short positions are crowded. A short squeeze is a commonly cited risk, but it’s only one possibility.
The point of understanding this metric is to be less alarmed by the numbers, not to use it to predict market tops or bottoms.
Markets change quickly, so make your own decisions.