What the funding rate calculator does
Perpetual futures never expire, so exchanges keep their price close to the spot market with funding: a periodic payment between longs and shorts. When the funding rate is positive, longs pay shorts; when it is negative, shorts pay longs. The exchange does not keep the payment — it passes from one side of the market to the other. The calculator shows what that means in dollars for your position over the time you plan to hold it, and how large it is compared with the margin you posted.
How to use it
- Choose long or short.
- Enter the position value (the notional: quantity × price, not your margin) and the leverage.
- Enter the funding rate per interval as the exchange shows it, for example 0.01%. Type a negative rate with a minus sign.
- Choose the funding interval. Every 8 hours is the most common, but some contracts settle every 4 hours or every hour.
- Enter how long you plan to hold the position, in days or hours.
The formula
payment per interval = position value × funding rate
who pays = longs if the rate is positive, shorts if it is negative
payments = holding hours ÷ interval hours (rounded down)
total funding = payment per interval × payments
annualized rate = rate × (24 ÷ interval hours) × 365
Funding is charged only to positions open at the funding timestamp — for an 8-hour interval, typically 00:00, 08:00 and 16:00 UTC. Depending on when you open, a holding period can cross one timestamp more or fewer than the average.
Worked example
Long $10,000 of a BTC perpetual at 10× leverage ($1,000 of margin), funding +0.01% every 8 hours, held 7 days:
- Each payment: 10,000 × 0.01% = $1.00, paid by you because you are long and the rate is positive.
- 7 days × 3 payments = 21 payments: −$21.00 in total.
- That is 2.1% of your margin, and an annualized rate of 0.01% × 3 × 365 = 10.95% of the position value.
A short of $50,000 when funding is −0.03% every 8 hours pays $15 per payment: −$135 over 3 days.
Hourly contracts charge less per payment but more often: 0.00125% every hour on $20,000 costs $0.25 an hour, or $6 a day — exactly the same as 0.01% every 8 hours.
Funding and leverage
Funding is calculated on the position value but paid out of your margin. At 1× leverage a 0.01% payment is 0.01% of your capital; at 20× it is 0.2%. During strong trends funding can climb far above the 0.01% baseline: a $25,000 short at 20× receiving 0.05% every 4 hours would collect 12% of its margin in two days, while the longs on the other side pay the same. On isolated margin, payments reduce the margin and pull the liquidation price closer — check it with the liquidation calculator.
Where to find the funding rate
Exchanges show the current or predicted rate and a countdown to the next funding time on the contract's trading page, usually next to the mark price, and keep a history of past rates. The figure shown before the timestamp is an estimate that moves until settlement. Most exchanges cap the rate per interval, and some shorten the interval for a contract when the cap is reached. For a position held a week or more, average the recent history rather than using the latest print, and rerun the numbers when conditions change. For a sense of scale, we added up a full year of BTC, ETH and SOL funding on Binance.
Common mistakes
- Calculating on the margin. Funding applies to the full position value; at high leverage it is much larger relative to your margin than the rate suggests.
- Assuming the rate stays constant. The rate is recalculated every interval from the gap between the perpetual and the index price. Treat the result as an estimate for current conditions.
- Ignoring the interval. A 0.01% rate every hour is eight times the cost of 0.01% every 8 hours.
- Counting funding as an exchange fee. It is a transfer between traders, so it can be income as well as a cost.
- Leaving it out of a backtest. On positions held for days or weeks, funding can turn a small edge into a loss.