How much do trading fees cut into funding rate arbitrage?

How the trade is built

In the usual setup you buy the coin on the spot market and short the same amount in perpetual futures. The spot holding offsets the price risk of the short, and while funding is positive, longs pay shorts, so the short collects funding at each settlement. With negative funding the trade runs the other way — sell or borrow the coin on spot and go long the perpetual — and borrowing adds interest. A third variant holds opposite perpetual positions on two exchanges to capture the gap between their funding rates. BingX describes all three in its funding-arbitrage guide, and warns that trading and transfer fees can quickly eat into profits.

Four fills, two fee schedules

Every fee is a percentage of notional value (see how futures fees are calculated):

• Open: buy spot (spot fee) + open the short (futures fee)
• Close: sell spot (spot fee) + close the short (futures fee)

On loweef's partner exchanges the standard futures taker fee is 0.04–0.05% per side and the maker fee 0–0.02%. The spot legs follow the exchange's own spot fee schedule, which is a separate table — check it rather than assuming it matches the futures rate. The cross-exchange version pays four futures fees instead, plus any withdrawal or network fee to move collateral between the two exchanges.

How many settlements to break even

Funding is paid on the futures leg's notional value only, once per settlement you hold through. So:

settlements needed ≈ (2 × spot fee rate + 2 × futures fee rate) ÷ funding rate per settlement

BingX, OKX and MEXC settle every 8 hours by default — three times a day. Fewer settlements than that number and the trade has lost money even if the rate never changed. OKX also shortens the interval to 4, 2 or 1 hour on a contract whose rate hits its cap or floor, and scales the rate to the interval, so a shorter interval doesn't by itself mean more funding per day (see why funding intervals change).

What else eats the yield

• The rate moves. MEXC describes its funding rate as non-fixed; at any settlement it can fall or turn negative, and then your short pays instead of receives.
• Only open positions count. OKX and MEXC state that only positions held at the settlement time pay or receive, and BingX settles funding only on open positions — enter just after a settlement and you wait a full interval for the first payment.
• Basis and slippage. The two legs never fill at exactly the same price or moment. The gap between spot and perpetual prices at entry and exit is a gain or loss on top of fees.
• Liquidation of the futures leg. The spot gain sits in a different account from the short's margin. In a sharp rally the short can be liquidated while the pair is flat on paper — BingX lists margin and liquidation pressure among the main risks (see futures liquidation fee).

Lowering the fee side

• Use resting limit orders where you can: the maker rate is lower than the taker rate (see maker vs taker fees).
• Hold longer, trade less. The four fees are paid once per round trip, however many settlements you collect in between; closing and reopening around each settlement multiplies them.
• A fee rebate returns part of the trading fees you pay: on loweef's partner exchanges, 50–65% of each futures fee comes back to you. It never covers funding, and it never turns trades opened only to create volume into a profit — you always pay more in fees than comes back.

To compare the two costs for a single position held over time, see funding fee vs trading fee.