FUNDING FEE – REFLECTIVE MIRROR OF MARKET PSYCHOLOGY IN DERIVATIVES
Trading futures without understanding what funding fee is like driving a car without a rearview mirror – you know how to drive but do not know where the crowd is heading.
WHAT IS FUNDING FEE?
This is the fee exchanged directly between long and short players.
+ Positive funding: long pays the fee to short.
+ Negative funding: short pays the fee to long.
The exchange only acts as an intermediary, not profiting from this amount.
WHAT DOES IT TELL US?
Funding is a thermometer measuring market sentiment:
+ High positive funding → FOMO rampant → easy to adjust.
+ Deep negative funding → extreme pessimism → be careful of a reversal.
It is a hidden but extremely effective indicator, as it does not rely on charts, but on actual cash flow behavior.
IN SUMMARY:
Funding is not just a number. It is the hidden side of the market – where the true emotions of investors are most clearly expressed. Knowing how to read funding, you will no longer be lost among the crowd.
