$DOOD Current funding rate: -0.0132% (settled every 1 hour). Shorts pay, and simply annualizing this period’s rate gives approximately 116%.
Let’s use this figure to break down funding rates.
The annualized rate is just this period’s rate extrapolated over a year. The rate changes every period, so don’t treat it as a guaranteed annualized figure.
For those holding positions on the paying side, the higher the rate, the more they pay at each settlement, and the cost of holding the position rises accordingly.
Leave more room when using leverage—don’t let a sudden wick wipe out your position.
Let’s use this figure to break down funding rates.
The annualized rate is just this period’s rate extrapolated over a year. The rate changes every period, so don’t treat it as a guaranteed annualized figure.
For those holding positions on the paying side, the higher the rate, the more they pay at each settlement, and the cost of holding the position rises accordingly.
Leave more room when using leverage—don’t let a sudden wick wipe out your position.