Funding rates, and why a 'correct' trade still bleeds

Funding rates, and why a 'correct' trade still bleeds

Perpetual futures don't expire, so exchanges use a funding rate to tether the perp price to spot. Longs pay shorts when funding is positive; shorts pay longs when it's negative. It settles every 8 hours on most venues.

Right now the widest funding on Bitget's USDT-M book is BICOUSDT at -1.9996% per interval — roughly -2189.6% annualised if it held (it won't).

What that number actually tells you: 1. Sign = which side is crowded. Deeply negative funding means shorts are paying to stay short, which is a crowded-short tell, not a sell signal. 2. Magnitude = cost of carry. A 0.1% funding print is 0.3%/day. On a 10x position that is 3%/day of your margin, before fees. Most "the trade went sideways and I still lost" stories are this. 3. Funding is not free money. The classic spot-long / perp-short basis trade collects funding but eats fees on both legs and carries liquidation risk on the perp leg.

Do the arithmetic before the thesis. Fee + funding drag is the single most common reason a directionally-correct trade ends up flat.

Market context: Fear & Greed 71 (Greed), BTC dominance 59.1%.

Tools & fee-tier checklist: https://partner.bitget.com/bg/jadck3ff

Get 20% fee rebate on Bitget →20% of your trading fees back, on every product. The rebate comes out of the commission I would otherwise receive, so it costs you nothing. Affiliate link — see the footer.