Queenby Funding Rates: The Small Cost Futures Traders Forget
Why does your balance shrink when the price hasn't moved? How funding rates work, when they're paid, and why the number can also be a market signal.
If you've ever opened a futures position and watched the balance dip slightly while the price went nowhere, that was most likely a funding fee. It's small each time, but on a position held for days it starts to add up.
What is a funding rate?
Perpetual contracts on Binance have no expiry date. To keep their price tied to spot, there's a funding mechanism: regular payments between long and short traders.
- When the funding rate is positive, longs pay shorts.
- When the funding rate is negative, shorts pay longs.
The payments go directly between traders, not to Binance.
When it's paid, and how much
On most pairs, funding is settled every 8 hours (00:00, 08:00 and 16:00 UTC, or 07:00, 15:00 and 23:00 WIB). Some pairs switch to every 4 hours, or even every hour, when the market heats up. The exact schedule is on each coin's contract page.
The formula is simple:
Funding = position value × funding rate
Example: a $1,000 long with a 0.01% funding rate pays $0.10 each period. Held for 3 days (9 periods) at the same rate, that's about $0.90 in total.
| Position value | Funding rate | Per period | 3 days (9 periods) |
|---|---|---|---|
| $1,000 | 0.01% | $0.10 | $0.90 |
| $1,000 | 0.05% | $0.50 | $4.50 |
| $5,000 | 0.03% | $1.50 | $13.50 |
You only pay funding if your position is still open at the funding time. Close a minute before and you pay nothing.
Funding as a market signal
High, positive funding means lots of traders are long and willing to pay up to stay long. Markets like that are easy to "flush": the price dips a little, a wave of longs gets stopped out or liquidated, and the drop gets deeper. The reverse applies when funding is deeply negative.
So funding isn't just a cost. It also tells you how crowded one side of the trade is.
In the Queenby journal
All funding paid or received while a position is open goes into each trade's net PnL. The figures you see in the trade history are already net of commission and funding, so they're what actually reached the balance.
This article is for education only. It is not financial advice or a recommendation to buy or sell any asset. Futures trading is high risk. See also our Terms & Conditions.
