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Funding Rate (perpetuals)

Also known as: Perp funding
Difficulty: intermediate
Periodic payment between longs and shorts that anchors perpetual price to spot.
Formula
Funding ≈ basis × interval factor

Perpetual futures have no expiry. Exchanges apply a funding rate so that longs pay shorts when the perpetual trades at a premium to the spot index, and vice versa at a discount.

Positive funding signals leveraged long demand; sustained high funding can indicate crowded risk.

Related terms

See also