What Is the Effect of a Positive Funding Rate on Long Positions?

A positive funding rate means the perpetual contract is trading at a premium to the spot price. In this scenario, holders of long positions must pay a fee to holders of short positions.

This payment acts as a disincentive for longs and an incentive for shorts, helping to push the contract price back down toward the spot price. The payment is automatically deducted from the long's margin.