Who pays perpetual funding, and how often
Perpetual funding is not a daily fee. Binance often settles every 8 hours, and some contracts move to every 4 hours or every 1 hour. Only an open position pays.
On a perpetual futures contract, funding is a payment between traders who are long and traders who are short. It exists because the contract has no expiry, so this payment is what pulls the contract price toward the spot price. When the funding rate is positive, longs pay shorts. When the funding rate is negative, shorts pay longs. The venue moves the money. A positive rate is not a fee the venue keeps. It is also not a once-a-day charge. The interval belongs to the contract: Binance often uses 8 hours, and a contract can move to 4 hours or 1 hour.
Who pays whom
Binance states the direction in its futures fee FAQ, updated 5 January 2026. If the funding rate is above zero, a long position pays and a short position receives. If the rate is below zero, the long receives and the short pays. If you are flat at that timestamp, you neither pay nor receive for that settlement. Binance also says it facilitates the exchange and does not charge a service fee on the funding amount. Commission on the order is a separate fee.
The FAQ gives the USD-margined calculation as funding fee equals notional value times the fee rate, and notional value equals the number of contracts times the trade price. Read "fee rate" there as the funding rate for that settlement, not as the trading commission. Coin-margined contracts use a different notional formula on the same page. This article stays with the USD-margined case.
One settlement, in dollars
The figures in this article's images are a worked example, not a recorded market run. Notional is $10,000. The funding rate for this one settlement is 0.01%, which is 0.0001 of notional.
payment = notional x funding rate
10,000 x 0.0001 = 1.00
The panel shows the long payment as -1.00 dollar and the short payment as +1.00 dollar, on a notional of 10,000. The sign is the cash flow for that side. Price movement over the same hour can be much larger than $1.00. Funding is a carry cost, or a carry credit, on top of that move.
Three settlements at an unchanged 0.01% would be $3.00 for the day only if the contract actually settles three times and the rate stays at 0.01%. Do not multiply by three until you have checked the interval.
The interval is part of the contract
Binance's FAQ says funding typically settles every 8 hours, and that the frequency varies by pair. Eight-hour settlements it lists at 00:00, 08:00, and 16:00 UTC. Four-hour settlements add 04:00, 12:00, and 20:00 UTC. A Binance announcement effective 2 May 2025 describes a further change: if a USD-margined perpetual's settlement reaches that contract's funding cap or floor, the interval can move to every one hour, and that one-hour schedule is not automatically returned to eight or four hours. The announcement's BTCUSDT example uses a default of eight hours and a cap of +0.3% and -0.3%. Other contracts differ, including some that were already on a shorter interval.
The practical rule is to read the current interval and the cap for the contract you hold. A backtest that assumes a universal eight-hour clock will mis-count payments in both directions: too few when the contract settles hourly, too many when you apply eight-hour payments to a contract on a different schedule.
Holding across the timestamp is what creates the payment. Opening and closing between two settlements skips that settlement. A strategy that is flat most of the time can still pay a large share of its result in funding if it happens to be open at the print. The opposite is also true: a strategy that looks expensive in a funding column may have been flat at the timestamps that mattered.
What Tradee means by funding
Tradee uses the same word for something else. On Execution, funding is the modeled capital for a run: a standalone budget, or a slice of a pool. It is not an exchange funding payment, and it is not read from an exchange wallet. Strategy, bot, and execution places that field on the run, not on the strategy file.
A Tradee backtest can include commission and slippage. It does not debit a perpetual funding rate on its own. If you test a perpetual and leave this payment out, the result is missing a cost that depends on how long you are long or short across settlement times. Paper trading vs backtesting already lists funding among the costs a simulation can understate. Treat the $1.00 example as a bill you add when the test did not add it.
That also means a positive modeled result on a perpetual is not evidence that funding was paid. Check the cost settings. If the funding rate is absent, say so next to the result.
What to write next to a perpetual test
- The contract, including whether it is USD-margined.
- The funding interval you assumed, and the source of that interval.
- The rate you assumed at each settlement, or the series you used.
- The notional the rate multiplies. Use position notional, not margin.
- Whether the position was open at the timestamp.
- Commission and slippage as separate lines.
A spot position does not pay this funding rate. Comparing a spot test with a perpetual test without a funding line compares different instruments. The price series can look similar and the carry will not.
FAQ about funding rate
Does the exchange keep the funding payment?
On Binance's published description, no. The payment moves between long and short holders. Commission is the separate fee on the order. Other venues can write different rules, so check the contract you trade.
If I use 10x leverage, do I pay 10 times the funding?
The Binance USD-margined formula multiplies the rate by notional, and notional is contracts times trade price. Leverage changes how much margin you post for that notional. It is not a second multiplier on top of notional. A $10,000 position pays the same $1.00 at 0.01% whether the margin behind it is large or small, until liquidation or a different notional changes the position.
Methodology and sources
Payment direction, the flat-position exception, the USD-margined formula, and the eight-hour and four-hour clocks are taken from Binance's futures fee FAQ. The one-hour adjustment and the statement that it does not automatically revert are taken from Binance's 2 May 2025 settlement-frequency announcement. The worked payment is 10,000 x 0.0001 = 1.00 at a positive 0.01% rate. Tradee's execution funding and the absence of an automatic perpetual-funding debit are product behavior, not venue rules. This article is educational and does not provide personalized investment or trading advice.
This article is for education. It is not financial advice. Trading can lose money. Past results do not guarantee future results.