Glossary / Glossary term
Funding rate
The funding rate is a periodic payment between longs and shorts on perpetual futures that keeps the contract close to the spot price.
Perpetual futures have no expiry, so they need another way to stay close to the spot price. At each funding time, one side pays the other a share of the position's value: when the rate is positive, longs pay shorts; when it is negative, shorts pay longs.
How it is applied here
The simulation uses the rate and the funding times published by the venue. Every position open at a funding time pays or receives funding on its value at the mark price. The payment is booked to the balance.
Why it matters for the rules
- It counts toward that day's result, so it can change your best day for the consistency rule.
- It is checked against the floors like any other change to the balance.
- A position held for days pays or receives it many times.
Each market page, for example BTC perpetual futures, shows the current rate and the next funding time.
Related
- Perpetual futuresPerpetual futures are crypto derivatives with no expiry that track a coin's price through funding payments, traded long or short on margin.
- Perpetual futures in a prop challenge: leverage, funding and liquidationHow perpetual futures work in a simulated prop account: mark price, margin and leverage caps, funding, fees, and why a breach comes before liquidation.
- Weekends, nights and news: trading crypto around the clockCrypto never closes. What that means for holding positions overnight and at weekends, the daily reset, funding times and trading through news.