💸📉 Funding rates on perpetual futures are often overlooked, but they drain countless traders' accounts silently. Simply put, funding is the mechanism that keeps the perpetual futures price close to the spot price. If the futures price is higher than spot (positive funding), longs pay shorts. If futures are lower (negative funding), shorts pay longs. It happens usually every 8 hours.
I used to ignore this. Imagine holding a $1,000 position with a positive funding rate of just 0.01% every 8 hours. That's $0.10 three times a day, totaling $0.30 daily. Doesn't sound like much, but it's $9 a month directly out of your pocket! In strong trends, rates can spike to 0.1% or more, costing you serious money daily. These quiet costs erode small gains or deepen losses without you noticing until it's...
I used to ignore this. Imagine holding a $1,000 position with a positive funding rate of just 0.01% every 8 hours. That's $0.10 three times a day, totaling $0.30 daily. Doesn't sound like much, but it's $9 a month directly out of your pocket! In strong trends, rates can spike to 0.1% or more, costing you serious money daily. These quiet costs erode small gains or deepen losses without you noticing until it's...