If you're new to Binance Futures, you might have noticed something called a "Funding Fee" being added or deducted from your balance. Don’t worry—you're not alone. Many new traders are confused about it. This article will explain what funding fees are, when they’re charged, how to check them, and how they affect your profit and loss—with simple examples.
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What Is the Funding Fee?
The funding fee is a periodic payment exchanged between long and short positions. It’s designed to keep the perpetual futures price in line with the spot market price.
If more traders are long (buying), the funding rate becomes positive, and longs pay shorts.
If more traders are short (selling), the funding rate becomes negative, and shorts pay longs.
Binance doesn’t take this fee—it’s simply transferred between traders.
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When Is It Charged?
Funding fees are charged every 8 hours, at:
00:00 UTC
08:00 UTC
16:00 UTC
You are only affected by the funding fee if you're holding a position at the time of settlement. If you close your position before the funding time, you avoid the fee entirely.
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How to Check the Funding Rate?
You can check the funding rate directly in the Binance Futures trading interface:
1. Open the Futures tab.
2. At the top of the screen (just below the pair name like BTCUSDT), you’ll see:
Funding Rate (e.g., +0.0100%)
Next Funding Countdown Timer
You can also click the “Info” tab to see the funding history and upcoming rate estimates.
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Real-Life Example:
Let’s say you are trading BTCUSDT Perpetual Futures:
You open a long position of 1 BTC at $60,000.
The funding rate is +0.0100%.
You hold your position at 16:00 UTC when funding is applied.
Your Fee Calculation:
Funding Fee = Position Size × Funding Rate
= 1 BTC × 0.0100%
= 0.0001 BTC (around $6 at $60,000)
So, you pay $6, which goes to someone holding a short position.
If the rate had been negative, and you were short, you would have received that $6 instead.
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Tips to Avoid or Use Funding Fees Smartly:
Avoid the fee by closing your position just before funding time.
Use negative funding rates to your advantage by opening positions where you get paid for holding.
Monitor rates frequently—high funding rates often signal over-leveraged positions and potential reversals.
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Final Thoughts:
The funding fee might seem small, but it can add up—especially if you're holding large positions or using leverage. Always check the current funding rate and countdown before holding a trade long term.
Trading smart means understanding not just the charts, but also the mechanics behind them—and funding fees are one of the most important.
