Can a Trader Avoid Paying or Receiving the Funding Rate? ⎊ Path

Can a Trader Avoid Paying or Receiving the Funding Rate?

Yes, a trader can avoid paying or receiving the funding rate by ensuring their position is closed before the designated funding time. The payment or receipt only applies to positions that are open at the exact moment the funding exchange occurs.

By closing a position minutes before the exchange and reopening it immediately after, the trader avoids the payment.

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Glossar

Funding Rate

Mechanism ⎊ Funding Rate represents a periodic payment exchanged between traders holding opposing positions in perpetual futures contracts, establishing an equilibrium between contract prices and the underlying spot market.

Receiving the Funding Rate

Payment ⎊ Receiving the funding rate refers to the periodic payment received by a trader holding a specific position in a perpetual futures contract.