Glossary
What is a funding rate?
Also called: funding fee, perpetual funding, funding payment
Updated Ninja Terminal team
Definition
A funding rate is a periodic payment exchanged between long and short traders in a perpetual futures market. It is driven by the gap between the contract price and the underlying spot or index price. When the rate is positive, longs pay shorts. When it is negative, shorts pay longs. This pressure keeps the perpetual price close to spot.
A perpetual future has no expiry date, so nothing forces its price to converge with spot the way a dated contract does at settlement. The funding rate takes that role. If the perpetual trades above the index price, the rate turns positive and longs pay shorts. That makes holding longs more expensive and pulls the contract back toward spot. See perpetual futures for the full mechanism.
How is a funding payment calculated?
The payment is the position’s notional value multiplied by the funding rate. You only pay or receive it if you hold the position at the funding time.
Example: you are long 0.5 BTC with BTC at 60,000. Notional is 30,000. At a funding rate of +0.01%, the payment is 30,000 x 0.0001 = 3 USD, paid by you to the shorts. At -0.01%, you would receive 3 USD instead.
The notional basis differs by venue. Binance documents it as mark price x contract size. Hyperliquid documents position size x oracle price. See mark price.
How often is funding paid?
| Venue | Interval | Notes |
|---|---|---|
| Binance | Default every 8 hours (00:00, 08:00, 16:00 UTC) | Binance can change the interval; some contracts move to 1 hour or 4 hours |
| Bybit | Set per instrument | The instruments endpoint returns fundingInterval in minutes (480 in the BTCUSDT example) |
| OKX | Published per instrument | The funding-rate endpoint returns fundingTime and nextFundingTime |
| Hyperliquid | Every hour | The 8-hour formula applies, but one eighth of the rate is paid each hour; capped at 4% per hour |
Intervals can change, so read the interval for the exact contract you trade.
Where does it appear in Ninja Terminal?
Ninja Terminal alerts can fire when a funding rate goes above or below a level you set, per exchange, market, and symbol.
Frequently asked questions
Is the funding rate a fee paid to the exchange?
No. It moves between traders who hold opposite positions. Binance states that it charges no fee on funding payments.
Do I pay funding if I close before the funding time?
On Binance, you pay or receive funding only if you hold a position at the funding time. Check the rule for your own venue.
Can a funding rate be negative?
Yes. A negative rate means shorts pay longs, which usually happens when the perpetual trades below the index price.