How to use the funding rate calculator
- Choose long or short. With a positive rate, longs pay and shorts receive.
- Enter the position size as its notional value in dollars, or as a quantity and price. Use the full position, not the margin: a $1,000 margin at 10× leverage is a $10,000 position.
- Enter the funding rate per interval shown on the contract page. Most exchanges show the current or predicted rate next to a countdown to the next funding time. Enter a negative number if shorts are paying.
- Choose the funding interval. Every 8 hours is common, but some contracts and exchanges use 4-hour or 1-hour intervals, so check the contract details.
- Enter how many days you expect to hold the position.
How funding is calculated
Payment per interval = Notional × Funding rate
Total funding = Payment per interval × PaymentsLongs pay this amount and shorts receive it when the rate is positive; the direction reverses when the rate is negative. Notional = quantity × price.
Annualized rate (compounded) = (1 + Rate)Intervals per year − 1
Break-even move = Total funding ÷ NotionalIntervals per year = 24 ÷ Interval hours × 365, so 1,095 for 8-hour funding. The break-even move is the price change, as a share of the entry price, that offsets the funding.
A worked example
You hold a $10,000 long position on a Coin A perpetual for 30 days. The funding rate is 0.01% every 8 hours.
That makes 90 payments of $1.00, so the position pays $90.00 in total. The price has to rise 0.90% just to cover the funding. In yearly terms, the rate is 10.95% simple or 11.57% compounded.
A short position of the same size would receive $90.00 over the same period, before fees.
How rate, interval and time change the cost
| Same $10,000 long | Funding (negative = paid) | Share of the position |
|---|---|---|
| 0.01%, 8-hour funding, 30 days | -$90.00 | 0.90% |
| 0.05%, 8-hour funding, 30 days | -$450.00 | 4.50% |
| -0.01%, 8-hour funding, 30 days | $90.00 | 0.90% |
| 0.01%, 1-hour funding, 30 days | -$720.00 | 7.20% |
| 0.01%, 8-hour funding, 365 days | -$1,095.00 | 10.95% |
The interval matters as much as the rate. The same 0.01% charged every hour instead of every 8 hours costs eight times as much, so an hourly rate has to be far smaller than an 8-hour rate to cost the same. Compare rates only after converting them to the same interval or to an annual figure.
Funding is charged on the notional, so its effect on your margin scales with leverage. At 10× leverage the margin is a tenth of the notional, and the same funding takes ten times as large a share of it. Over weeks, steady funding can move a leveraged position measurably closer to its liquidation price; the liquidation price calculator shows how close it already is.
Reading funding as a market signal
Persistently positive funding means more traders want to be long than short at the contract’s price, and they pay for it. Persistently negative funding means the reverse. Some traders use this as a sentiment gauge, and some run delta-neutral trades that hold spot and short the perpetual to collect positive funding. Those trades carry their own risks: rates can turn negative, the short leg can be liquidated in a sharp rally if margin runs low, and exchange or counterparty failures affect both legs.
What this calculator does not include
- Changing rates. The calculator holds the rate constant. Real funding rates are recalculated every interval and can swing between positive and negative.
- Changing notional. Funding is charged on the position value at the mark price at each funding time, so it grows as the price rises and shrinks as it falls.
- Exchange caps and formulas. Exchanges calculate the rate from a premium index and an interest component, and many cap it per interval.
- Trading fees and taxes, which are separate from funding.
- Price risk, which for most holding periods is far larger than the funding itself.