Funding fee
A funding fee is a periodic payment exchanged directly between long and short holders of perpetual futures, keeping the contract's price anchored to the underlying index. It is paid between traders — the exchange only facilitates it.
Perpetual contracts never expire, so they need a mechanism to stop their price drifting away from the spot index they track. Funding is that mechanism: at fixed intervals, whichever side is "pushing" the contract away from the index pays the other side. Positive funding means longs pay shorts; negative means shorts pay longs.
The payment equals your position's notional × the current funding rate, and applies only if you hold the position across the funding timestamp — close before it and no funding changes hands. Unlike trading fees, funding can be income: holding the side that receives funding gets paid to keep the position.
Because funding flows between traders rather than to the exchange, it is not commission-generating and sits outside rebate math — a payback applies to your maker/taker fees, not funding. For cost accounting, treat them as separate lines: fees are always a cost you partially recover via rebate; funding is a cost or income depending on your side and the market's skew.
Funding fees explained in depth →