Just saw this: $SAND has a current funding rate of -0.136% (settled every 8 hours). Shorts pay, which works out to an annualized rate of about 149.1% if you simply extrapolate this period.
People often ask what the funding rate means. Here’s how I understand it.
The funding fee is calculated by multiplying the position’s notional value by the funding rate: for a position with a notional value of 10,000 U, a funding rate of 0.01% means a payment of 1 U per period.
The further the rate moves from normal levels, the more crowded one side’s positions are. If the price then moves in the opposite direction, the risk of cascading liquidations also increases.
The same reading can mean very different things under different market conditions, so don’t blindly apply a single rule.
#SAND
This may not be entirely accurate, so don’t treat it as advice.
People often ask what the funding rate means. Here’s how I understand it.
The funding fee is calculated by multiplying the position’s notional value by the funding rate: for a position with a notional value of 10,000 U, a funding rate of 0.01% means a payment of 1 U per period.
The further the rate moves from normal levels, the more crowded one side’s positions are. If the price then moves in the opposite direction, the risk of cascading liquidations also increases.
The same reading can mean very different things under different market conditions, so don’t blindly apply a single rule.
#SAND
This may not be entirely accurate, so don’t treat it as advice.