How to Use the "Funding Rate" Table?

Funding Rate: How to Use the Table

The Funding Rate table is a powerful tool for traders who deal with perpetual futures. It helps in assessing market sentiment, identifying arbitrage opportunities, and making more informed trading decisions.

1. The Basics: What Does the Table Show?

The table provides a summary of funding rates for various cryptocurrency pairs across all popular exchanges.

• Ticker: The first column displays trading pairs like BTCUSDT, BTCUSD, ETHUSDC, etc. The icon next to the name helps you quickly identify the asset.

• Exchanges: The subsequent columns (Binance, Bybit, OKX, MEXC, BingX) show the current funding rate for a specific trading pair on the corresponding exchange.

2. How to Read the Rate Values?

The value in each cell is the percentage that traders either pay or receive for holding an open position.

• Positive Rate (e.g., 0.0027%): This indicates that long positions are dominant in the market. In this scenario, traders holding long positions pay a fee to those holding short positions. This suggests bullish sentiment.

• Negative Rate (e.g., -0.0075%): The situation is reversed. Short positions are predominant, and traders holding shorts pay those holding longs. This is a signal of bearish market sentiment.

• Dash (—): This means that the instrument is not traded on that exchange, or the data is temporarily unavailable.

• Green Color (e.g., 0.0110%): Often used to highlight abnormally high positive rates, which may indicate a strong imbalance between long and short positions.

• Red Color (e.g., -0.0110%): Used to highlight abnormally low negative rates, also indicating a strong imbalance.

3. Using Filters and Settings

At the top of the screen, you'll find convenient tools to customize the data display.

• Currency Filter (All, USDT, USDC, Coin (USD)): These buttons allow you to quickly filter the list to show only contracts quoted in the selected stablecoin or in USD (for inverse contracts).

• Exchange Filter (Exchanges): By clicking this button, you can select or deselect the exchanges you want to see in the table. This is useful if you only trade on specific platforms.

• Interval Normalization (Real, Current, Off): Funding rates are typically charged every 8 hours, but some pairs have different funding intervals. Comparing the current rate of a 1-hour interval contract with an 8-hour one is meaningless. This feature allows you to normalize rates to a common interval.

  • Real: Normalizes all rates to an 8-hour period based on the actual historical payouts within that timeframe.
  • Current: Normalizes all rates to an 8-hour format by simply multiplying the current rate by the number of periods needed to make up 8 hours.
  • Off: Displays the current, raw funding rate without any normalization. Keep in mind that comparing these rates directly without considering their intervals is incorrect.

• Show Intervals: This toggle adds a column to the table showing the funding interval for each pair. It's usually 8 hours, but some pairs have 1, 2, or 4-hour intervals. If you don't see an interval next to a pair, its interval is the standard 8 hours.

Practical Application

1. Assessing Market Sentiment: If you see positive rates across most assets on all exchanges, it signals a general bullish sentiment. Conversely, widespread negative rates suggest bearish sentiment.

2. Choosing an Exchange for Trading: If you plan to hold a long position for an extended period, it's more profitable to choose an exchange with the lowest (or even negative) funding rate. The opposite is true for short positions. This can help you avoid funding fees and even earn additional income.

3. Finding Arbitrage Opportunities: Compare the funding rates for the same asset on different exchanges. If the rate on Exchange A is strongly positive and on Exchange B it's negative, you can open opposing positions (e.g., short on A and long on B) to earn the rate difference while hedging against price risk. For finding such opportunities, it is better to use our dedicated "Funding Arbitrage" tables for futures-futures and futures-spot markets.

This table is an indispensable assistant for anyone who takes futures trading seriously. Use it for your analysis, and your trading strategies will become more sophisticated and profitable.