$ERA ｜Rate -0.256%｜Shorts pay funding
What is the funding rate? It consists of two parts: the premium of the contract relative to spot, plus a fixed interest component. When the premium is small, the 8-hour rate for most contracts stays around 0.01%.
Deeply negative funding rates are sometimes common when shorts are crowded. The commonly cited risk is that shorts may be forced to cover, pushing prices higher, but this is only one possibility.
Keep extra margin for leveraged positions, so one sudden price swing doesn’t wipe you out.
What is the funding rate? It consists of two parts: the premium of the contract relative to spot, plus a fixed interest component. When the premium is small, the 8-hour rate for most contracts stays around 0.01%.
Deeply negative funding rates are sometimes common when shorts are crowded. The commonly cited risk is that shorts may be forced to cover, pushing prices higher, but this is only one possibility.
Keep extra margin for leveraged positions, so one sudden price swing doesn’t wipe you out.
