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What are perpetual futures contracts funding fees and funding rates? Why is the funding rate sometimes as low as 0.00001% and sometimes as high as 2 00%? Why is it sometimes positive and sometimes negative? Why does the charging frequency sometimes change from every 4 hours to every 1 hour? In short, perpetual futures contract funding rate and funding fees are designed to stabilize the market to avoid systemic failure that can be caused by high volatility and / or too great deviation between spot and futures market prices of the trading symbol. Funding rate can be positive or negative depending on the long to short ratio. if the majority of traders have open long positions, the funding rate will be positive and if, however, the majority of traders have open short positions, the funding rate will be negative. Additionally, funding rate can also remain the same if the deviation in price between the spot and futures price is too great. Generally, positive or negative funding rate is decided by either price deviation or long to short ratio. Funding rate amount (percentage) is calculated based on the deviation or difference between spot and futures price of the trading symbol but the actual amount that is charged in BNFCR or BNB depends on the size of your position. The frequency of charging funding fee can sometimes change from every 4 hours to every 1 hour when the trading symbol long to short ratio is heavily one sided and symbol has low liquidity and / or has become volatile (when the price swings are too great). Additionally it can also change to because of a too great deviation between spot market and futures price. The purpose of that mechanism is to have traders close their positions and / or switch to opposite direction positions Conclusion: Market decides what will change and market is traders. Details can be read in screenshots. ⬇️ #manageyourrisk #TradeResponsibly PIPPIN , H , OM , RESOLV , ASTER , SUI , ETH , SOL
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$RESOLV if many square folk say long then it's probably short
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$OM was this just throwing a bait
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$ALLO omg 📉
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$BOB everyone is already short so go short while market is in downtrend
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