📈 What Happened to LPT/USDT Recently? 📊
🌟 $LPT price exploded from around $7 to a high of $14.357! 🚀 ⚡️ Many traders who opened long positions made huge profits! 💰 😤 But they still complained that funding fees were eating their profits! 🦈 So, let's understand what funding fee is, how they are imposed and what your consideration should be. 😇
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🧐 What is Funding Fee? 🤔
💡 Funding fee is a small payment between traders that happens periodically (every hour/ every 2 hours etc.) ⏰ 🎯 It keeps the Futures price close to the Spot price! 🎯 ➕ If funding rate is positive, longs pay shorts. ➖ If negative, shorts pay longs. 🔄
✅ Formula of Funding Fee = Position Size × Funding Rate
🤔 Now What is Funding Rate?
Funding rate reflects trader sentiment and demand between longs and shorts. It is not directly linked to price movement
🎯 If more people are longing → funding rate turns positive.
🎯 If more people are shorting → funding rate turns negative.
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📝 Simple Examples with LPT/USDT 📘
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1️⃣ You Took Long Position + Price 📈 Up
▶️ You will make Profit But Pay Funding 💸
🛒 You long LPT at $7.5 and it goes up to $14! 🤑 🎯 You are making big profits because price doubled! 🚀 💰 BUT the funding rate is likely positive because many people are also longing. 🏦 💸 You have to pay funding fee to shorts, even if you’re winning! 📉
🖊️ Example:
Long 100 LPT at $7.5, now price is $14.
Funding rate is 0.02%.
Funding fee = 100 × 14 × 0.02% = $0.28 every 8 hours! 🕗
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2️⃣ You Took Long Position + Price 📉 Down
▶️ You will make Loss And Pay Funding 😭
🛒 You long LPT at $12 but it drops to $10. 📉 🫣 You lose on the price move — painful! 💔 💸 If funding is still positive, you STILL have to pay shorts! 🏦
🖊️ Example:
100 LPT long at $12, now $10.
Funding 0.02%.
Funding fee = 100 × 10 × 0.02% = $0.20! 😖
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3️⃣ You Took Short Posotion + Price 📈 Up
▶️ Loss But Receive Funding 💰
🛒 You short LPT at $9 expecting it to fall, but it rises to $14. 🫨 💔 Big loss on the price! But since funding is positive, shorts receive money! 💸
🖊️ Example:
100 LPT short at $9, price now $14.
Funding 0.02%.
Funding collected = 100 × 14 × 0.02% = $0.28. 🪙
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4️⃣ You Opened Short Position + Price 📉 Down
▶️ You will Win And Receive Funding 🥳
🛒 You short LPT at $14, it falls to $11. 📉 🎯 You win on the price move! 🎉 💸 And because funding is positive, you also receive funding fee from longs! 💰
🖊️ Example:
100 LPT short at $14, now $11.
Funding 0.02%.
Funding earned = 100 × 11 × 0.02% = $0.22! 🏆
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🧠 Final Thoughts 🔥
👉 Funding fee is not about your profit or loss, it's about long vs short balance! ⚖️ 👉 When the price pumps, funding rate usually turns very positive, and longs pay a lot! 💵 👉 Even if you are winning big on price, funding fee can reduce your gains! 📉 👉 Always check funding rates before opening long or short! 🧐
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🎯 Conclusion: Watch the Price, But Also Watch the Funding! 🎯
🚀 LPT/USDT gave amazing profits 📈, but the funding fee silently takes its share 🦹♂️. 📚 Smart traders manage both entry price and funding rates to win big! 🏆 💡 Happy Trading! Stay Smart! 🚀💰
