A quick note: $XEC ’s latest funding rate is -0.28% (settled every 4 hours), with shorts paying.
People often ask what the funding rate means. Here’s how I understand it.
You can think of the funding rate as a toll for holding a position: whichever side pushes the contract price away from the spot price usually pays.
The rate generally returns to normal either when the price pulls back or when the crowded side closes positions. You’ll need to look at subsequent changes in open interest to tell which is happening.
Don’t change your pace because of a single indicator, and definitely don’t gamble on a prediction with borrowed money.
People often ask what the funding rate means. Here’s how I understand it.
You can think of the funding rate as a toll for holding a position: whichever side pushes the contract price away from the spot price usually pays.
The rate generally returns to normal either when the price pulls back or when the crowded side closes positions. You’ll need to look at subsequent changes in open interest to tell which is happening.
Don’t change your pace because of a single indicator, and definitely don’t gamble on a prediction with borrowed money.
