Just saw this: $DOS ’s current funding rate is -0.104% (settled every 4 hours). Shorts pay, which works out to an approximate annualized rate of 226.8% based on this period.
People often ask how to interpret funding rates. Here’s how I think about them.
You can think of a funding rate as rent for holding a position: whichever side pushes the contract price away from the spot price is usually the side that pays.
For those holding positions on the paying side, the more extreme the rate, the more they pay at each settlement—and the higher their holding costs become.
Indicators aren’t always accurate, so don’t skip your stop-loss: thinking in advance about what you’ll do if you’re wrong is more important than predicting correctly.
#DOS
When volatility is high, manage your risk first.
People often ask how to interpret funding rates. Here’s how I think about them.
You can think of a funding rate as rent for holding a position: whichever side pushes the contract price away from the spot price is usually the side that pays.
For those holding positions on the paying side, the more extreme the rate, the more they pay at each settlement—and the higher their holding costs become.
Indicators aren’t always accurate, so don’t skip your stop-loss: thinking in advance about what you’ll do if you’re wrong is more important than predicting correctly.
#DOS
When volatility is high, manage your risk first.