#QUESTIONOFTHEDAY
Do we Recieve or do we Pay a funding for each trade
Yes No or it depends hear is a quick summary of what i discovered
To receive a Binance funding fee, you need to hold a long position (buying) while others hold short positions (selling) in a futures contract when the funding rate is negative. Funding fees are payments made between traders with opposing positions in a futures contract, with those with long positions paying short positions when the funding rate is positive, and short positions paying long positions when the rate is negative.
Here's a more detailed explanation:
Funding Rate:
The funding rate is a percentage calculated based on the difference between the perpetual contract price and the spot price of the underlying asset, as well as the interest rate.
Positive Funding Rate:
When the perpetual contract price is higher than the spot price (positive premium), long positions are expected to pay short positions a funding fee.
Negative Funding Rate:
When the perpetual contract price is lower than the spot price (negative premium), short positions are expected to pay long positions a funding fee.
Receiving Funding Fees:
To receive funding fees, you need to hold a long position and the funding rate must be negative.
Funding Time:
Binance specifies funding times (e.g., 08:00 UTC) when funding payments are calculated and settled.
Position Timing:
You must have an open long position at the pre-specified funding time to potentially receive the fee, Binance notes. If you close your position before the funding time, you won't receive any fee.