$BIRB Current funding rate: -0.521% (settled every 4 hours); shorts pay.
A beginner’s question: What exactly is the funding rate?
When the contract price is higher than the spot price, the rate is often positive, and longs pay; when it’s lower than the spot price, the rate is often negative, and shorts pay.
The rate should usually be considered alongside open interest and price: when the rate is high and open interest is surging, the market is generally more crowded.
The same reading can mean very different things in different market conditions, so don’t blindly apply a one-size-fits-all rule.
A beginner’s question: What exactly is the funding rate?
When the contract price is higher than the spot price, the rate is often positive, and longs pay; when it’s lower than the spot price, the rate is often negative, and shorts pay.
The rate should usually be considered alongside open interest and price: when the rate is high and open interest is surging, the market is generally more crowded.
The same reading can mean very different things in different market conditions, so don’t blindly apply a one-size-fits-all rule.