Funding Rate Calculator — Perpetual Futures Costs & Income
Calculate the funding rate cost or income on your perpetual futures position. Enter position size, funding rate, and holding period to see exact funding payments over any time period.
Notional value of your perpetual position
Per-interval rate; can be negative (e.g. -0.01)
How often funding is settled
Your direction in the market
How many days you plan to hold
Your leverage multiplier (for reference only)
You will pay in funding
−$21.00
Funding rate is positive (0.01%/interval). Long positions PAY short positions. You are long, so you pay funding.
Annualized Rate
10.95%
Funding intervals
3× per day
Per Interval
−$1.00
Per Day
−$3.00
Per Week
−$21.00
Per Month (30d)
−$90.00
30-Day Funding Cost
−$90.00
As % of Margin
−9.00%
High Funding Cost
* Funding costs are calculated on the full notional position size. Leverage affects your margin, not your funding cost — a $10,000 position at 10× leverage still pays funding on $10,000 notional. Rates on live exchanges fluctuate every interval.
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How to Use the Crypto Funding Rate Calculator
Enter your position size in USD — this is the notional value of your perpetual futures position, not the margin. For example, if you open a $10,000 BTC-PERP position with 10× leverage, your notional size is $10,000 and your margin is $1,000. Funding is always calculated on the full notional.
Next, enter the funding rate per interval as a percentage. This is the rate shown on your exchange (e.g. Binance, Bybit, OKX) next to the perpetual contract. A typical rate is 0.01% per 8 hours. Funding rates can be negative — enter a negative value if the rate is below zero (meaning shorts pay longs).
Select the funding interval — most major exchanges settle funding every 8 hours (3× per day). Some exchanges use 4-hour or 24-hour intervals. Then select your position side (Long or Short) and the number of holding days. The result updates as you type, showing how much you will pay or receive over the holding period, broken down by interval, day, week, and month.
The Formula
Perpetual futures funding is a periodic payment between long and short traders to keep the perpetual contract price anchored to the spot price. The calculation is straightforward:
- Intervals Per Day = 24 / Funding Interval Hours (e.g. 24 / 8 = 3 for 8-hour funding)
- Cost Per Interval = Position Size (USD) × Funding Rate (%) / 100
- Cost Per Day = Cost Per Interval × Intervals Per Day
- Total Cost = Cost Per Interval × (Holding Days × Intervals Per Day)
- Annualized Funding Rate = Funding Rate × Intervals Per Day × 365
Who Pays Whom?
- Positive funding rate: Long traders PAY short traders. The perpetual is trading at a premium to spot — the market is bullish.
- Negative funding rate: Short traders PAY long traders. The perpetual is trading at a discount to spot — the market is bearish.
A 0.01% per 8-hour rate annualises to 10.95% (0.01% × 3 × 365). This means holding a $10,000 long position costs ~$1,095 per year in funding at a constant 0.01% rate — a significant drag that traders must factor into their holding cost analysis.
Practical Examples
Example 1 — Typical Bull Market: Long BTC-PERP for 7 Days
- Position Size: $10,000 | Funding Rate: +0.01% per 8h
- Funding Interval: 8 hours (3× per day) | Side: Long
- Holding Period: 7 days
- Cost Per Interval: $1.00 | Cost Per Day: $3.00
- Total Cost: $21.00 (you pay)
During bull markets, funding rates frequently spike to 0.05–0.1%+ per 8 hours on BTC and ETH perpetuals. At 0.1%/8h, the same position costs $10.00/interval, $30.00/day, and $210.00 over a week — materially eating into profits on leveraged long positions.
Example 2 — Negative Funding: Long ETH-PERP for 14 Days
- Position Size: $25,000 | Funding Rate: −0.02% per 8h
- Funding Interval: 8 hours | Side: Long
- Holding Period: 14 days
- Income Per Interval: $5.00 | Income Per Day: $15.00
- Total Income: $210.00 (you receive)
During bear markets or corrections, funding can turn negative, meaning shorts pay longs. Traders sometimes hold a long perpetual position purely to collect negative funding — a form of funding rate arbitrage when the price exposure is hedged with a spot short or borrowed coins.
Example 3 — High Leverage Scalp: $100,000 Notional for 1 Day
- Position Size: $100,000 | Funding Rate: 0.05% per 8h
- Funding Interval: 8 hours | Side: Long
- Holding Period: 1 day
- Cost Per Interval: $50.00 | Cost Per Day: $150.00
- Total Cost: $150.00 for one day
Even short holding periods can produce meaningful funding costs at high notional sizes. A $100,000 position at 0.05% funding costs $150 per day — equivalent to needing a 0.15% price move just to break even on a zero-commission trade.
Cash-and-Carry Arbitrage with Funding Rates
A popular market-neutral strategy: buy $10,000 of BTC on spot and simultaneously short $10,000 BTC-PERP. You are price-neutral (spot gains and perp losses cancel), but you collect funding when the perp rate is positive. At 0.03%/8h, you earn 0.09%/day = ~32.85%/year on the notional — risk-free if managed properly. This is why funding rates compress toward zero over time as arbitrageurs enter the trade.
Frequently Asked Questions
A perpetual futures contract is a derivative that tracks the price of an underlying asset (e.g. BTC, ETH) but has no expiry date — you can hold it indefinitely. Unlike traditional futures that expire monthly or quarterly and require rolling, perpetuals never settle to spot. Instead, a funding rate mechanism periodically transfers money between long and short traders to keep the perpetual price anchored to the spot price. Perpetuals are the most actively traded instrument in crypto, accounting for billions of dollars in daily volume on exchanges like Binance, Bybit, and OKX.
The funding rate represents the cost of holding a leveraged perpetual position. It is determined by the difference between the perpetual contract price and the underlying spot price (the premium index), plus an interest rate component. When the perpetual trades above spot (positive premium), the funding rate is positive — longs pay shorts to incentivise more selling and bring the price down. When it trades below spot, the rate is negative — shorts pay longs. Most exchanges publish funding rates every few seconds and settle them every 4 or 8 hours. Rates of ±0.01% per 8 hours are typical; extreme market conditions can push rates to 0.1–0.5%+ per interval.
Funding is always calculated on the full notional value of your position, not the margin. For example, if you open a $10,000 BTC-PERP position with 10× leverage, you post $1,000 margin but pay funding on $10,000. At 0.01% per 8-hour interval, that is $1 per interval regardless of your leverage. This is a critical distinction: higher leverage amplifies your price exposure and potential profit/loss, but it does not change the absolute funding cost — it only changes the funding cost as a percentage of your margin.
Experienced traders use funding rates in several ways: (1) Avoiding high funding: if you plan to hold a long for weeks during a bull run, high positive funding erodes profits — consider spot instead; (2) Funding arbitrage (cash-and-carry): buy spot + short perp simultaneously to collect positive funding while being price-neutral; (3) Collecting negative funding: during bearish periods funding often turns negative, so shorts pay longs and a hedged long perp earns funding; (4) Position timing: opening a long just after a funding settlement means you do not pay again for up to 8 hours; (5) Funding as a sentiment indicator: consistently high positive rates signal overheated bullish speculation — a potential contrarian signal.
The largest crypto perpetuals exchanges include Binance, Bybit, OKX, dYdX, Hyperliquid, and BitMEX (the originator of the perpetual contract). Funding intervals vary: Binance and Bybit use 8-hour settlement (3× daily), while some newer exchanges and decentralised protocols use 1-hour or continuous funding. Rates differ by exchange because they reflect each platform's own order book dynamics. During high-volatility events, funding can diverge significantly across exchanges, creating arbitrage opportunities. Always check the live funding rate on your specific exchange before opening a position you plan to hold overnight.
Sources
- Perpetual futures (funding rate mechanism) (Wikipedia)
- Introduction to Binance Futures Funding Rates (Binance)
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