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What Is a Funding Rate in a Perpetual Futures Contract?

A periodic payment between long and short positions to align the perpetual contract price with the underlying asset's spot price.
Greeks.Live06.11.25

What Is a Funding Rate in a Perpetual Futures Contract?

The funding rate is a periodic payment exchanged between the long and short sides of a perpetual futures contract. It is designed to keep the perpetual contract's price anchored to the underlying asset's spot price.

If the contract trades at a premium, longs pay shorts; if at a discount, shorts pay longs.

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