Ever checked your account and wondered, “Where did my profits go?” You're not imagining things — funding fees might be the reason.
Let’s clear something up first:
Binance doesn’t pocket this money.
Funding fees are part of how the futures market works. It’s a system where traders pay each other every 8 hours — at 00:00, 08:00, and 16:00 UTC — depending on market conditions.
Why do these fees increase sometimes?
1. When most traders are long, they pay those who are short.
2. If futures prices deviate too far from the spot price, funding rates rise.
3. Certain high-volatility tokens (think trending coins) tend to have unpredictable fees.
Important for Traders to Know:
If you’re holding large positions across multiple funding intervals, these fees can quietly eat into your profits. You might look profitable on paper, but your actual returns could be much lower once fees are factored in.
How to manage it like a pro:
● Always check the current funding rate before entering a position.
● Be cautious with large trades on highly volatile tokens.
● Consider closing your position before the next funding time.
● If the funding is working against you, think about reversing your position — but only with strong technical analysis to back it up.
● Or, position yourself to **earn** the funding instead of paying it.
In short, funding fees can either drain your gains or become a strategic advantage — it all depends on how you use them.
Have you had a rough experience with funding fees, or figured out how to make them work for you? Share your insights — we all learn better together
