Futures and Perpetuals · Crypto Trading Guide

Perpetual contracts use funding to help connect their price with a reference market. Learn how the payment affects a position over time.

Understand the contract design

A conventional perpetual contract has no scheduled expiry, though product naming and legal structures vary. Funding transfers are used to help anchor its price to a reference. Always check the actual specification. A product described as perpetual can still have special maturity or termination provisions.

Calculate a funding payment

Assume a fictional contract charges longs a positive 0.01% funding payment for one interval. A $20,000 position pays $2 for that interval if the contract uses that notional at the funding time. At negative funding the direction can reverse under the common convention. The payment is based on the specified position exposure, not simply the deposited margin.

Do not extrapolate one observation

If an assumed 0.01% payment occurred three times daily for a full year, simple annualised cost would be 10.95% of unchanged notional. That is an illustration of scaling, not a forecast. Rates, prices and position size change, and venues use different intervals or continuous accrual. A predicted next funding rate can differ from the rate actually charged.

Reconcile the complete position

Imagine a long produces $120 of price profit, pays $24 funding and incurs $16 execution costs. Net profit is $80. If price profit were only $20, the same costs would create a $20 loss. Track realised funding separately from unrealised price profit and margin transfers. A funding receipt is compensation within a risky position, not interest guaranteed on a deposit. Monitor the liquidation buffer because funding debits can reduce available equity even when the market price is unchanged.

Try it yourself

A short receives 0.02% on $15,000 notional in one hypothetical interval. What is the payment?

Show the worked answer

It receives $3 for that interval under the stated sign convention. This says nothing about price profit, fees or future funding.

Further reading

Educational material. Examples and rates are hypothetical, not trade recommendations. Product terms, eligibility and risks vary by venue and jurisdiction.

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