How Can Traders Use the Funding Rate to Their Advantage?

Traders can use the funding rate to their advantage in a number of ways. One way is to use it to identify arbitrage opportunities.

If the funding rate is high, it may be possible to profit by shorting the perpetual contract and buying the underlying cryptocurrency. Another way to use the funding rate is to use it as a sentiment indicator.

A high funding rate may indicate that the market is bullish, while a low funding rate may indicate that the market is bearish.