Namaste Tribe!
A Funding Fee is a periodic payment exchanged between Long and Short traders in Futures trading. It helps keep Futures prices aligned with Spot market prices.
How Do Funding Fees Work in Futures Trading?
| Funding Rate | What You Should Know |
|---|---|
| Positive Funding Rate | Traders holding Long positions pay funding fees to traders holding Short positions. |
| Negative Funding Rate | Traders holding Short positions pay funding fees to traders holding Long positions. |
Important: Funding fees are exchanged periodically between Long and Short traders to help maintain alignment between Futures and Spot market prices.