For example, yesterday's ACH: Many friends do not understand the funding rate, which is quite important and must be learned!

Here I would like to share some practical knowledge about the funding rate: Calculation and significance of the funding rate

Meaning of the funding rate:

1. The upper right corner of each cryptocurrency will display the funding rate and countdown for that currency, usually settled every 8 hours. (For example, in the screenshot below)

If the rate is positive, long positions pay the short positions; if it is negative, the opposite is true.

Generally, this can reflect the long-short sentiment. For example, if a cryptocurrency has a funding rate of -3%, it means that most people are shorting it. If you short at this time, the settlement funding rate will deduct a larger fee.

Some market manipulators may use this to intentionally pump the price to profit from the funding rate.

2. Calculation of the funding rate:

Funding rate minus costs = Cost value of position size * Leverage * Funding rate

For example:

Cost value of 30U to open a position with 10X leverage and a funding rate of -3%, the calculation would be: 30 * 10 * 0.03 = 9U that needs to be deducted or earned.