Funding fee is a fee paid for keeping your position open for a certain period of time in leveraged transactions. This fee occurs frequently, especially in futures and margin transactions. This duration is approximately 8 hours. The funding fee, which is paid 3 times a day, can be increased to 4 payments in order to control the price, although it is rare.
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The funding fee may increase or decrease depending on the price difference between the spot market and the futures market for the pair you are trading. The funding rate we see on exchanges also represents the percentage representation of these metrics.
The funding fee may increase or decrease depending on the price difference between the spot market and the forward market of the parity you are trading with. The Funding rate we see in the stock markets also shows us the percentage representation of these metrics.
Since the market generally moves contrary to the majority, instead of taking trades based on the funding rate data, you can use it as an indicator in your trades.
