Funding ate the initial $20. And the long is still alive.
Funding — payments between longs and shorts. With a positive rate, longs pay; with a negative rate, they receive. The amount is calculated from the entire position, not just your margin.
A hypothetical example, with no other funds and trading fees:
You deposit 20 USDT, with 20× leverage — the position is 400 USDT.
The price gradually rises by 10% — unrealized PNL is +40 USDT.
Let’s say funding is always +0.05% every 8 hours. The average position value during the deductions is 420 USDT. Under these conditions, across 96 deductions — about 32 days — the funding costs would be 20.16 USDT.
Funding consumed the initial 20 USDT and another 16 cents on top. But the open long has +40 USDT in unrealized profit, so the margin balance remains 39.84 USDT.
The position is sustained by profit as long as collateral stays above the maintenance margin. If the price reverses, this buffer may not be enough.
On screen: +40 USDT. The result after funding is +19.84 USDT, with no trading commissions.
In TradFi on Binance Futures, you trade the movement of stock prices. You don’t buy the assets themselves.
#TradFi #Binance
Funding — payments between longs and shorts. With a positive rate, longs pay; with a negative rate, they receive. The amount is calculated from the entire position, not just your margin.
A hypothetical example, with no other funds and trading fees:
You deposit 20 USDT, with 20× leverage — the position is 400 USDT.
The price gradually rises by 10% — unrealized PNL is +40 USDT.
Let’s say funding is always +0.05% every 8 hours. The average position value during the deductions is 420 USDT. Under these conditions, across 96 deductions — about 32 days — the funding costs would be 20.16 USDT.
Funding consumed the initial 20 USDT and another 16 cents on top. But the open long has +40 USDT in unrealized profit, so the margin balance remains 39.84 USDT.
The position is sustained by profit as long as collateral stays above the maintenance margin. If the price reverses, this buffer may not be enough.
On screen: +40 USDT. The result after funding is +19.84 USDT, with no trading commissions.
In TradFi on Binance Futures, you trade the movement of stock prices. You don’t buy the assets themselves.
#TradFi #Binance
