binance funding rate

What is the Funding Rate? The Funding Rate is a core mechanism in perpetual futures trading. It is a periodic fee paid between long and short traders to ensure the price of the perpetual contract (the mark price) converges with the spot price of the underlying asset. Since perpetual contracts have no expiration date, this mechanism prevents the contract price from drifting too far from the spot price indefinitely.

How Does the Funding Rate Work? Positive Funding Rate (+): When the rate is positive, long positions pay short positions. This typically happens when the perpetual contract is trading at a premium to the spot price, indicating bullish market sentiment. Negative Funding Rate (-): When the rate is negative, short positions pay long positions. This occurs when the perpetual contract is trading at a discount to the spot price, indicating bearish sentiment.

On Binance, funding typically occurs every 8 hours at these specific UTC times.