The risk appetite of financial institutions is not only increasing — but also becoming more expensive.

A key indicator, reflecting the cost for large investors to maintain a long position in stocks, has just risen to its highest level since December 2024.

This shows that institutions are willing to pay more to maintain an optimistic outlook, continuing to be the main fuel driving the market towards new price peaks.

❍ Funding Spreads Rise to Highest Level in 11 Months

The index known as the “funding spread” has increased by 8 basis points in the past week.

Funding spread measures the cost for institutional investors to gain long positions in stocks through derivative instruments such as futures, options, or swaps.

When this index increases, it means they are willing to pay a higher price to maintain long positions, a clear sign of strong confidence in the upward trend.

❍ Impressive Rise Since May

The recent increase is part of a larger trend that has formed over many months.

Since May 2025, funding spreads have increased by a total of more than 40 basis points.

This indicates that institutional investors are continuously expanding long positions, reflecting the belief that the market will continue to rise in the medium term.

❍ Main Drivers of the S&P 500's Rise

The increase in demand from institutions has become a strong driving factor helping the S&P 500 reach new record highs.

This trend is similar to 2024, when the willingness to pay more for stock positions helped maintain a stable and sustainable upward trend in the market.


💭 Perspective From “Smart Money”

Funding spread can be seen as the cost of holding leveraged long positions.

When this cost increases, it means that the demand for “long” is exceeding the supply of leverage, and institutions are willing to accept higher costs because they trust in future profits.

The increase in funding spreads by a total of 40 basis points since May shows that this is not a short-term excitement,

but rather a sustainable confidence that has built up over more than half a year — continuing to be the underlying momentum for the historic rise of the market.