Home › Glossary › Funding rate

Funding rate: definition and meaning

The funding rate is a periodic payment between long and short traders in perpetual futures that keeps the contract price near the spot price.

Why it matters

Depending on the market, you may pay or receive funding while holding a position.

Related terms

• Perpetual futures
  A perpetual future is a derivative contract that tracks an asset's price and has no expiry…
• Leverage
  Leverage lets you open a position larger than your own capital by borrowing, which multipl…

Guides that explain more

• Spot vs Futures Trading: What's the Difference?
• What Is a Funding Rate in Perpetual Futures?

Educational content only, not financial advice.