A note: $ARPA ’s latest funding rate is -0.347% (settled every 8 hours); shorts pay.
People often ask how to interpret funding rates. This is how I understand them.
The money is paid between longs and shorts; it isn’t a fee charged by the exchange.
A deeply negative funding rate is sometimes common when short positions are overly concentrated. One often-mentioned risk is that shorts may be forced to cover, pushing prices higher, but that’s just one possible scenario.
Calculating position size based on the stop-loss distance is much more reliable than choosing it by gut feel.
#ARPA
It’s your money, so you decide.
People often ask how to interpret funding rates. This is how I understand them.
The money is paid between longs and shorts; it isn’t a fee charged by the exchange.
A deeply negative funding rate is sometimes common when short positions are overly concentrated. One often-mentioned risk is that shorts may be forced to cover, pushing prices higher, but that’s just one possible scenario.
Calculating position size based on the stop-loss distance is much more reliable than choosing it by gut feel.
#ARPA
It’s your money, so you decide.