What Funding rate shows
The fee perpetual-futures traders pay each other every 8 hours to keep the contract near the spot price.
Indicator guide · Crypto derivatives
Funding rate: what it shows, settings and how to read it.
The fee perpetual-futures traders pay each other every 8 hours to keep the contract near the spot price.
How it is calculated
On perpetual futures, traders holding long positions pay those holding shorts (or the other way round) every few hours, so the futures price stays close to the spot price. The rate is set by the exchange from the gap between the two.
Usual settings
Nothing to set. Around 0.01% per 8 hours is neutral on most exchanges.
How traders read it
High positive funding means longs are crowded (and paying); negative funding means shorts are crowded. Extremes often come before a squeeze the other way.
Where it fails
A crowded trade can stay crowded for a long time.
What to combine it with
Open interest and price: very high funding with rising open interest means crowded longs, which can unwind fast.
Try Funding rate on a live chart
Sign in, open Genni Charts, press the "ƒx Indicators" button above the chart and choose Funding rate. Click its name on the chart to change the settings. It is free for every member.
More in "Crypto derivatives": Open interest · All 25 indicators
Questions
Frequently asked questions
What is the Funding rate indicator?
The fee perpetual-futures traders pay each other every 8 hours to keep the contract near the spot price.
What are the best settings for Funding rate?
The usual settings are: Nothing to set. Around 0.01% per 8 hours is neutral on most exchanges. No setting is best in every market, so test a change on past data before relying on it.
Is Funding rate reliable on its own?
No single indicator is. A crowded trade can stay crowded for a long time. Most traders use it together with: Open interest and price: very high funding with rising open interest means crowded longs, which can unwind fast.
How do I add Funding rate to a chart for free?
Sign in, open Genni Charts, press the "ƒx Indicators" button above the chart and choose Funding rate. Click its name on the chart to change the settings. It is free for every member.
This page is education, not investment advice. Trading involves substantial risk of loss. Read next: Trading indicators · Trading strategies · Candlestick patterns