Lesson 06 · 6 min
The payment between traders
A small percent, on a clock, on the full position. It adds up, and the sign tells you who pays.
If funding is positive, longs pay shorts. If funding is negative, shorts pay longs. That is the entire rule. People lose the rule because they memorize 'funding bad' instead of reading the sign.
Longs
Paying
$1.00
→
Shorts
Receiving or flat
Longs pay shorts
On a $10,000 position, this tick is $1.00. Repeated all day on a 8-hour clock, that is about $3.00. Positive rate means longs pay. Negative means shorts pay.
- The percent applies to the position, not the margin. On a $10,000 position, 0.01% is $1. On the $100 of margin behind a 100× position, that same $1 feels enormous.
- Binance and MEXC usually tick every 8 hours. Three ticks is a day. Coinbase US accrues hourly and settles twice a day. Kraken applies perp funding through the hour.
- You pay it for as long as you hold. A trade you meant to keep for an hour and actually kept for a week has a carrying cost. Write it down.
In one sentence. Positive funding: longs pay shorts. Negative funding: shorts pay longs. Same clock, opposite envelopes.
The funding rate is positive and you are long. At the next tick you…