How to avoid high funding rates? Try "Rate Hedging"
1. What is Rate Hedging?
When you don’t want to close your position during a high funding rate, you can open an equal-sized opposite contract (for example, if you hold a long position, open a short position to hedge) before settlement.
2. Specific Operations (using OKX as an example)
30 minutes before funding rate settlement
Open an equal-sized opposite contract (if long, open short; if short, open long)
Immediately close the hedged position after settlement
Be careful to use limit orders to reduce transaction fee losses
3. Key Reminders
Transaction fees are usually lower than funding rates (especially with VIP discounts)
Strictly calculate the timing; missing the settlement means the hedge is wasted
Most exchanges support dual-side positions (OKX/Binance, etc.)
Important Warning:
Hedging is just a temporary measure; holding a position long-term carries significant risks. The market may crash on the 10th time after you have held through 9 times. Be decisive in cutting losses when necessary, as that is the long-term strategy.
(Tip: You can think of hedging as "temporarily freezing your position," which preserves your holdings while avoiding high rates)
