How to Monitor and Understand Funding Rates
Learn how perpetual futures funding rates work, how they affect your positions, and how to track them on Midas.
What Are Funding Rates
Funding rates are periodic payments exchanged between long and short traders on perpetual futures contracts. They keep the perpetual contract price aligned with the spot market price. When the funding rate is positive, long traders pay short traders. When negative, short traders pay long traders.
View Current Funding Rates
On the Futures trading screen, the current funding rate and countdown to the next settlement are displayed near the contract information. You can also view funding rates across all contracts from the Futures dashboard by checking the funding rate column.
Understand Settlement Timing
Midas settles funding payments every eight hours. The payment is calculated based on your position size at the moment of settlement. The rate is dynamic and recalculated continuously based on the premium or discount of the futures price relative to the spot index price.
Check Historical Rates
Navigate to the funding rate history for any contract to view past rates and trends. Consistently high positive rates suggest the market is heavily long (bullish sentiment), while consistently negative rates suggest bearish sentiment. This can inform your trading decisions.
Manage Funding Costs
If you hold a position through a funding settlement, you either pay or receive the funding fee. For long positions in a positive funding rate environment, consider the cost as part of your overall trading expenses. Some traders time their entries and exits to minimize funding payments on extended holds.
Risk Disclaimer
Futures trading involves significant risk. Leveraged positions can result in losses exceeding your initial investment. Past performance does not guarantee future results. Only trade with funds you can afford to lose. This tutorial is for educational purposes only and does not constitute financial advice.