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Guides · 2 min
Positive vs negative funding rates: who pays whom?
A positive rate is a cost to longs and income to shorts; a negative rate reverses the flow. Here is how to read the sign without treating it as a price prediction.
The sign of a perpetual funding rate describes a payment direction. It does not, by itself, tell you whether the next price move will be up or down.
What the split looks like right now
Across the 2276 contracts this site tracks with a non-zero rate, 91.87% are currently positive — longs paying shorts. That lopsidedness is the normal state of a market where most participants want leveraged upside, and it is the reason a persistently negative contract is worth a second look rather than a shrug.
Positive funding
When funding is positive, long positions normally pay short positions at settlement. Positive funding often appears when the perpetual trades above its underlying spot index and demand for leveraged long exposure is stronger.
For a $10,000 long at +0.0120%, the next-settlement scenario is a $1.20 cost. A short of the same notional would normally receive the corresponding amount, subject to the venue's settlement rules.
Negative funding
When funding is negative, short positions normally pay long positions. A $10,000 long at −0.0120% would therefore have a $1.20 funding receipt at that settlement, while the equivalent short would pay.
Negative funding does not make a long position safe. A favourable funding payment can be much smaller than an adverse price move, trading fee or spread. Funding is one cash flow inside the position, not protection from market risk.
What the sign can and cannot tell you
The sign is evidence about the current relationship between the perpetual market and its reference price. A persistent positive rate can indicate expensive long carry; a persistent negative rate can indicate expensive short carry. Neither condition is a standalone reversal signal.
The useful questions are more concrete:
- Which side of the proposed position will pay?
- How large is the payment in dollars?
- How many settlements does the planned holding period cross?
- Is the sign consistent across venues or specific to one order book?
Why exchanges can show different signs
Each venue calculates funding from its own perpetual market and methodology. During dislocations, BTC-USDT can show positive funding on one venue and negative funding on another. The difference may create a cheaper place for a directional position, but moving venues adds execution, collateral and counterparty considerations.
Use the cross-exchange funding table to compare signs and intervals at the same observation time. Contract pages also translate each rate into the cost or income for a chosen side.