#交易手续费揭秘

What is the funding rate for contracts?

The funding rate for contracts is a fee mechanism that traders exchange among themselves in perpetual contracts, aimed at keeping the contract price close to the spot (real) price. This rate is usually settled every few hours, with most exchanges updating it every 8 hours.

📌 Positive Funding Rate vs Negative Funding Rate

Positive Funding Rate: When the market has a bullish position dominance (i.e., most people expect the price to rise), long traders must pay funding fees to short traders.

Negative Funding Rate: When the market has a bearish position dominance (i.e., most people expect the price to fall), short traders must pay funding fees to long traders.

📌 Implications of a Negative Funding Rate

When the funding rate is negative, it usually implies:

1. There is significant short-selling pressure in the market—meaning more traders expect the market to decline and thus take short positions.

2. Long positions receive funding subsidies, meaning traders holding long positions can receive fees.

3. Market sentiment is leaning towards bearish, with a general expectation of falling prices.

However, market behavior is not solely determined by sentiment. In contrarian strategies, large traders or institutions often take long positions in a generally bearish scenario. Why?

Because if the market suddenly rebounds, short positions will be forced to close, a phenomenon known as a short squeeze, which can trigger a rapid increase in prices.