Explanation of the funding fee equivalent to a Maybach
Funding fees are really not something you need to force yourself to chase,
Unless you have the speed of The Flash, I’ll just get straight to the point
As long as your position is still there in the last second before settlement,
The system will calculate based on the nominal value of your position × funding fee rate.
Note that the principal must be multiplied by the leverage to get the nominal value,
For example, if your principal is 10,000 USDT and you open 10x leverage, the nominal value is 100,000 USDT,
At this point, if the funding fee rate is 0.1%, you’ll be charged 100 USDT for one order.
Don’t think about opening a position 30 seconds before settlement to make money,
The exchange has already calculated the time discrepancy clearly,
The actual settlement window has a 15-second deviation, and if you time it wrong, you’re likely to be backstabbed.
With coins like $MAGIC, you can see a 4-point fluctuation in just 5 minutes,
That little funding fee isn’t enough to fill the hole.
Remember that funding fees can be positive or negative: a positive rate means longs give shorts a red envelope,
A negative rate means shorts give longs money, and if you get this wrong, you’ll lose badly.
Essentially, this is a risk compensation mechanism,
If you get hit, you can collect some reimbursement, but if you didn’t get hit and still join the fun,
You’ll be schooled by the market in no time. There are indeed experts who specialize in timing funding fees,
But they need high-frequency trading systems + millisecond-level ordering,
For ordinary people, playing this is like catching flying knives with bare hands.
It is recommended for beginners to start with a small position to test the waters, mainstream coins settle every 8 hours,
Others settle every 4 hours or 2 hours.
Funding fee rates can sometimes become traps for inducing shorts or longs, so be careful not to fall into the trap.
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