Funding rate calculator for perpetual futures

key_takeaways

Key takeaways

• Each payment is the notional value times the rate for one interval.
• Funding is charged on position value, not on margin, so leverage does not change it.
• In most designs a positive rate means longs pay shorts, and a negative rate means shorts pay longs.

Enter the size, the rate per interval, the interval length and your holding time. You get the cost per payment, the total, an annualized figure and the price move that covers it.

What if the rate were different?

Rates change at every interval. The rows below take the rate you entered and scale it, so you can see how the total moves. They fill in once the calculator has a result.

Multiples of the rate you entered, not forecasts.

How to use the funding rate calculator

1. Pick long or short.
2. Enter the notional value of the position, or switch to quantity times price. Funding is charged on position value, not on margin, so leverage does not change it.
3. Enter the funding rate per interval in percent, with its sign. Enter the interval length in hours.
4. Enter how long you plan to hold, in hours or days.
5. Choose how payments are counted. Payments usually happen at fixed times, so a hold counts only the full intervals that pass. Prorated spreads the cost evenly over the hours instead.
6. Add an entry price if you want the price move in dollars. Add your round-trip trading fee if you want the price move with fees and, when you receive funding, how long it takes to cover the fee.

The calculator opens with the hypothetical values of the worked example on this page, marked as example values. Replace them with your own, or press Clear to empty every field. The tool does not know your venue, so enter your venue’s rate, interval and fee.

Funding rate formula

Each payment is the notional value times the rate for one interval. The total is that payment times the number of payments in your holding time. This is the formula for your cost. The rate itself is set by your venue, and its own documentation explains how.

side         = +1 long, -1 short
payments     = floor(hold hours / interval hours)
               (prorated: hold hours / interval hours)
per payment  = side x notional x rate%
total        = per payment x payments
per day      = per payment x (24 / interval hours)
annualized % = side x rate% x (hours in a year / interval hours)
price move % = |total| / notional
price move $ = entry price x price move %
with fee     = (total + notional x fee%) / notional
fee covered  = after ceil(notional x fee% / |per payment|)
               payments, if you receive funding
(these formulas count a payment you make as positive; the results show it from your side with the opposite sign: a cost is negative, an income is positive)

Hours in a year means the hours of a calendar year without a leap day. The per-day and annualized figures are simple projections of one rate, not compounded and not forecasts.

Worked example

What does a funding cost calculator measure?

A perpetual futures contract has no expiry date. To keep its price close to the spot price, many designs let longs and shorts exchange a periodic payment called funding. In most designs the payment runs between traders, not as a fee to the venue. Once a position is open, funding is a cost or an income that grows with time, on top of trading fees.

This calculator multiplies the notional value of the position by the rate for every payment in your holding time. The arithmetic is laid out step by step so you can check it against your own statement. You can read more about the mechanism in funding rates, explained and about the positioning behind it in what open interest tells you.

Who pays? Reading the sign of the rate

In most designs a positive rate means longs pay shorts, and a negative rate means shorts pay longs. A positive rate usually appears when the perpetual trades above the reference price, so the payment pushes long holders to give up the premium. A negative rate is the mirror case.

The calculator follows this convention. A long with a positive rate shows a cost. A short with a positive rate shows income. It shows the amounts from your side: a cost is a negative number and an income is a positive number. Your venue states its own convention in its documentation, so check it before you rely on the sign.

This tool assumes one constant rate for the whole holding time. For a long hold, enter an average of the rates you expect, or use the scenario rows above to see a range.

How to read an annualized funding rate

Annualizing turns a small per-interval rate into a number that is easier to compare with other costs. The calculator multiplies the rate by the number of intervals in a year. Compounding is left out.

Treat the result as a way to feel the size of a rate, not as an expected return or cost. Rates rise, fall and change sign. A figure that looks large for one hot week can be near zero the next. See how perpetual futures work for why the rate moves at all.

How far does price have to move to cover funding?

If you pay funding, the position loses a little at every payment. The price move that covers it is the total cost divided by the notional. A long needs price to rise by that percent. A short needs price to fall by it.

If you receive funding, the same figure works as a cushion. Price can move against you by that percent before the income is gone. Without a fee the result assumes no trading cost and a constant notional, so it is a floor, not a full break-even.

The optional fee field adds your round-trip trading fee, in percent of the notional, to the picture. If you pay funding, the fee adds to the move you need. If you receive funding, the calculator shows after how many payments the income covers the fee. Leave the field empty to ignore fees.

Limits of this calculator

It uses one constant rate. Real rates change at every interval, so a long hold is better planned with a range of rates. It values the position at a fixed notional, while real payments follow the mark price of the moment.

Payment times, interval lengths, caps and the exact formula are set by your venue. In most designs only positions that are open at the payment time pay or receive funding, which is why full intervals are the default count. The tool does not model liquidation, margin tiers or an interest component, and it counts fees only if you enter one. Compare the output with your venue’s own statement, which decides.

Funding rate calculator FAQ

How do I calculate funding cost?

Multiply the notional value of your position by the funding rate for one interval. That is the cost of one payment. Multiply it by the number of payments in your holding time to get the total. In most designs a long pays when the rate is positive, and a short pays when it is negative.

What does a positive funding rate mean?

In most designs a positive rate means longs pay shorts. It usually appears when the perpetual trades above its reference price, so holding a long costs money and holding a short earns it. The payment goes between traders, not to the venue. Your venue’s documentation states its own convention, so check it before you rely on the sign.

What does a negative funding rate mean?

In most designs a negative rate means shorts pay longs. It usually appears when the perpetual trades below its reference price. A long then receives funding and a short pays it. Enter the rate with its minus sign: the calculator shows a long as receiving and a short as paying.

How are funding rates calculated?

Your venue sets the rate; this calculator does not predict it. How the rate is derived differs by venue, and in most designs it follows the gap between the perpetual’s price and a reference price. Your venue’s documentation states its own formula. The calculator takes the rate as an input and works out what it costs you. For the mechanism, read funding rates, explained.

How often is funding paid?

It depends on the venue, and interval lengths differ between venues. That is why the interval in the example is invented: enter the length your venue uses, in hours.

Does leverage change the funding I pay?

No. Funding is charged on the notional value of the position, not on the margin you post. Higher leverage means less margin for the same position, so the same payment is a larger share of your margin. The dollar amount stays the same.

Is the annualized funding rate a forecast?

No. It multiplies one rate by the number of intervals in a year, without compounding. Real rates change at every interval and can switch sign, so the figure only helps you judge how large a rate is.

Do I pay funding if I close before the next payment?

In most designs payments happen at fixed times and apply to positions that are open at that moment. A trade closed between two payment times usually pays nothing for that part. The default count in this calculator uses full intervals only. Check your venue’s rules.

Why does the calculator assume a constant rate?

A single rate keeps the arithmetic checkable by hand. For a longer hold, look at the scenario rows below the calculator, or use the lowest and highest rate you expect and compare the two totals. The Excel template also has a funding log with one rate per payment.