This article explains the mechanism and impact of Funding Fees in futures trading.
🔍 What Is a Funding Fee?
A Funding Fee is a periodic payment exchanged between traders holding perpetual futures positions.
Based on the funding rate, traders may either:
📌 Pay funding fees
📌 Receive funding fees
⚙ How Funding Fees Work
Funding fees help keep the futures price aligned with the spot market price.
📈 When Futures Price ＞ Spot Price
・Traders holding long positions pay funding fees
・Traders holding short positions receive funding fees
📉 When Spot Price ＞ Futures Price
・Traders holding short positions pay funding fees
・Traders holding long positions receive funding fees
⚠️Impact of Funding Fees
High funding fees may affect trading performance and may result in:
📌 Reduced profits
📌 Increased losses
📌 Higher liquidation risk
🛡 Key Points
Funding fees:
・Are charged periodically while holding positions
・May impact overall trading performance
If you have further inquiries, please don't hesitate to contact our Support Team via "Contact Us" function.
bitcastle Futures Trading: About Funding Fees
