Skip to main content
Learn

What Is the Funding Rate Mechanism in Perpetual Futures?

A periodic peer-to-peer payment between longs and shorts to keep the perpetual contract price aligned with the spot price.
Greeks.Live23.11.25

What Is the Funding Rate Mechanism in Perpetual Futures?

The funding rate is a periodic payment exchanged between long and short traders to keep the perpetual contract's price anchored to the underlying spot price. If the contract trades above the spot price, longs pay shorts (positive rate).

If it trades below, shorts pay longs (negative rate). It is not a fee to the exchange but a peer-to-peer transfer.

How Does the “Funding Rate” Mechanism Work to Keep the Perpetual Swap Price near the Spot Price?
How Does the ‘Funding Rate’ Mechanism Work in a Perpetual Swap?
How Does the Funding Rate Mechanism Keep the Perpetual Futures Price Close to the Spot Price?
How Does the Funding Rate Mechanism Work to Keep Perpetual Futures Prices Close to the Spot Price?

About

Contact

Editorial Policy

Terms of Service

Privacy Policy

Cookie Policy

© 2025 Greeks.Live

All Rights Reserved

Greeks.Live RFQ

Build by Noo on Engine

Source: The content on this website is produced by Greeks.live's proprietary analysis systems, which utilize advanced Large Language Models (LLMs). This information might not be subject to a full human review before publication and may contain errors.
Responsibility: You should not make any financial decisions based solely on the content presented here. We strongly urge you to conduct your own rigorous due diligence and to consult a qualified, independent financial advisor.
Purpose: All information is intended for informational purposes only. It should not be construed as financial, investment, trading, or any other form of professional advice. News and data are not trading signals.
Risk: The cryptocurrency, derivatives, and options markets are highly volatile and carry significant risk. By using this site, you acknowledge these risks and agree that Greeks.live and its affiliates are not responsible for any financial losses you may incur.