Funding rate | Bitcointalksearch.org

OcTradism

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Quote from: logfiles on September 05, 2023, 05:17:11 AM

You can earn some profit if the funding rate is abnormal and if the market does not go against your open position during that short time. Imagine having the balls to long and yet the market is dumping with some long red candle sticks all for the sake of earning that profit from the funding rate.

Also, it is very hard to predict what the next funding rate might be, it could be negative or positive. Things change in a flash.

I did not mean a trader must predict a next funding rate and try to get profit from funding rate on exchange. It is only very minor profit and traders should only take it if they can have both a draw for their position closing and minor profit from funding rate at the same time.

They close their current positions because feeling risk if they let those positions open longer. So it is good if with risk management for their positions, they can still have minor profit from funding rate which is not their main concern.

logfiles

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Quote from: OcTradism on September 04, 2023, 09:00:11 PM

By this, you can close your position with a draw and enjoy funding fee if you are in a side of short will be pay by long and long will be paid by short in that 8-hours.

It's not too much but if you can, you should close your position because after each 8 hours, market can have big movement, up or down maybe we don't certainly know. So it is safe to close our position before it moves and it's also good if we can earn small from funding fee.

You can earn some profit if the funding rate is abnormal and if the market does not go against your open position during that short time. Imagine having the balls to long and yet the market is dumping with some long red candle sticks all for the sake of earning that profit from the funding rate.

Also, it is very hard to predict what the next funding rate might be, it could be negative or positive. Things change in a flash.

Quote from: adaseb on September 04, 2023, 11:31:22 PM

You can’t make any money this way. Believe me I tried. What will happen is the funding rate will be near identical on all the exchanges.

Even if it is off by a little, you got basically 4 fees you will need to pay which will clear any profits. You would need to pay fees to open and close the trades twice on both exchanges.

In volatile situations, the funding rates of different shitcoin perpetual contracts in different exchanges can get abnormal, especially exchanges with not so good liquidity. It's possible to make profits if it goes over 1% and the trader is using high leverage, but of course there is a thin line between making profits and losses

Quote from: Oshosondy on September 05, 2023, 02:59:06 AM

Which exchange is that? I am using more than 5 exchanges and all of them have 8 hours range funding rate.

I think it was Kraken, though I haven't used it in a while.

Apparently, even DYDX have an hourly rate.

Oshosondy

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Quote from: logfiles on September 04, 2023, 05:47:23 PM

It's because so many people anticipate shitcoins to dump once they have pumped. So the funding rate ends up being negative and abnormally huge Grin

Exactly.

Altcoins are also very volatile and some traders are using the funding rate to make some analyses. If altcoin pump very well, I noticed many of them later get dumped. But they are generally a risky trading asset. When I am trading such altcoins, it is like I am gambling because there are many that do not follow bitcoin price.

Quote from: logfiles on September 04, 2023, 05:47:23 PM

Funding fee is deducted only every 8 hours or 1 hour (I remember an exchange that would charge hourly, but it was a few years back).

Which exchange is that? I am using more than 5 exchanges and all of them have 8 hours range funding rate.

Quote from: adaseb on September 04, 2023, 11:31:22 PM

You can’t make any money this way. Believe me I tried. What will happen is the funding rate will be near identical on all the exchanges.

I have seen a funding rate of 2% before. I was deducted $222 dollars that day. Although, I noticed that I made a profit of almost the same amount too which makes me not to gain or lose. I was using leverage that time, the story was not good but filled with losses because of high leverage.

Quote from: cryptocointrade.com on September 05, 2023, 01:26:54 AM

Here, traders who are going to take a short position anyway can take advantage of getting paid by taking a short position.

That depends on the funding rate. If it is negative, funding fee would be deducted from those that short as in the example in the OP.

Ahli38

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That's why I personally sometimes trade from the moment I place my position and from the moment it is filled. Then I will be out before every 8-hours. But if the market situation still allows for more profits then I think letting the 8 hour fee be deducted is no problem. Because it will be replaced by the profits from our positions which are still open and continue to make profits. But if it is in unprofitable position then I will close it immediately.

On Binance I prefer to use fees with BNB. So trading costs become cheaper.

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Quote from: GreatArkansas on September 04, 2023, 09:11:51 PM

Take note also that some traders are taking advantage of this funding rate, and some of them are making money because of the funding rate, I am not sure how they can do it but that is common I can see in some discussions of traders.
Maybe funding arbitrage where you will use more than 1 exchange, where you can open long and short trade positions on separate exchanges while the funding rate is different will make you profit off the funding rate.

Perpetual contracts are derivatives designed to track (or peg) the spot price.
So, if buyers push the perpetual contract up in price something has to be introduced to push the price against the spot price again.
Here, perpetuals are designed so the short sellers are getting paid (by long takers paying the funding rate) to take a position to push the price down again toward the spot price.

Here, traders who are going to take a short position anyway can take advantage of getting paid by taking a short position.

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Quote from: GreatArkansas on September 04, 2023, 09:11:51 PM

Take note also that some traders are taking advantage of this funding rate, and some of them are making money because of the funding rate, I am not sure how they can do it but that is common I can see in some discussions of traders.
Maybe funding arbitrage where you will use more than 1 exchange, where you can open long and short trade positions on separate exchanges while the funding rate is different will make you profit off the funding rate.

You can’t make any money this way. Believe me I tried. What will happen is the funding rate will be near identical on all the exchanges.

Even if it is off by a little, you got basically 4 fees you will need to pay which will clear any profits. You would need to pay fees to open and close the trades twice on both exchanges.

GreatArkansas

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Take note also that some traders are taking advantage of this funding rate, and some of them are making money because of the funding rate, I am not sure how they can do it but that is common I can see in some discussions of traders.
Maybe funding arbitrage where you will use more than 1 exchange, where you can open long and short trade positions on separate exchanges while the funding rate is different will make you profit off the funding rate.

OcTradism

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Quote from: logfiles on September 04, 2023, 05:47:23 PM

So short positions pay long positions in this scenario.

Funding fee is deducted only every 8 hours or 1 hour (I remember an exchange that would charge hourly, but it was a few years back). Any position opened and closed between the funding rate hours won't be charged the funding fee.

By this, you can close your position with a draw and enjoy funding fee if you are in a side of short will be pay by long and long will be paid by short in that 8-hours.

It's not too much but if you can, you should close your position because after each 8 hours, market can have big movement, up or down maybe we don't certainly know. So it is safe to close our position before it moves and it's also good if we can earn small from funding fee.

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Quote from: Oshosondy on September 04, 2023, 02:55:11 AM

This is one of the disadvantage of using shot coins to trade, because the funding fee can be high. I have been deducted over $200 before because of the funding fee of a shit coin on the future market.

It's because so many people anticipate shitcoins to dump once they have pumped. So the funding rate ends up being negative and abnormally huge Grin

So short positions pay long positions in this scenario.

Quote from: Oshosondy on September 04, 2023, 02:55:11 AM

If I close the position before the time stated, the exchange will not deduct anything?

I think the fee will not be deducted if I close the position before the next 8 hours began. What do you think?

Funding fee is deducted only every 8 hours or 1 hour (I remember an exchange that would charge hourly, but it was a few years back). Any position opened and closed between the funding rate hours won't be charged the funding fee.

Hamza2424

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Quote from: Oshosondy on September 04, 2023, 02:55:11 AM

This is one of the disadvantage of using shot coins to trade, because the funding fee can be high. I have been deducted over $200 before because of the funding fee of a shit coin on the future market.

I just tried to trade a shit coin on an exchange with $250, 1x short position USDⓈ-M Futures. The funding fee credit or debit would be in some minutes to this time.

If I close the position before the time stated, the exchange will not deduct anything?
I think the fee will not be deducted if I close the position before the next 8 hours began. What do you think?

OP with the statement Yes you won't be charged the Funding fees if you do exit before the time interval, you need to know that fees work differently on every platform there can be slightly different terms and conditions on every platform, as bid-ask spread does. So fully ensure how much a trade is costing you in terms of the fees all you need to do is go through the platform fees structure documentation. Becasue it is highly possible when you close the trade you will be charged the trading fees and if not may be there is another possibility that you've been already charged the trade fees when you open the position.

I don't know why but Paltofrm does such things

cryptocointrade.com

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Traders are only liable for funding payments in either direction if they have open positions at the pre-specified funding times. You are not liable for any funding if you do not have a position. If you close your position before the funding time, you will not pay or receive any funding.

Its not about you holding the contract for 8 hours, you must close it before the pre-specified funding times.

Also, remember due to the design of perpetual contracts and funding rates you can end up getting paid the funding rate

rybako

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Yes, correct. The funding fee for USDⓈ-M Perpetual contracts is charged every eight hours. If you close your position before the next funding time, you will not be charged the funding fee. However, keep in mind that there may be other fees associated with closing your position, such as trading fees.

Oshosondy

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This is one of the disadvantage of using shot coins to trade, because the funding fee can be high. I have been deducted over $200 before because of the funding fee of a shit coin on the future market.

I just tried to trade a shit coin on an exchange with $250, 1x short position USDⓈ-M Futures. The funding fee credit or debit would be in some minutes to this time.

Quote

[xxxxxxxx] USDⓈ-M Futures Funding Fee Notification
The UNFIUSDT position in your Binance USDⓈ-M Futures account (************) will be charged a funding fee at 2023-09-04 08:00:00 (UTC+0). The expected funding rate is -0.726%, and you will be charged a fee of 2.05262334 USDT.

If I close the position before the time stated, the exchange will not deduct anything?

I think the fee will not be deducted if I close the position before the next 8 hours began. What do you think?

Topic: Funding rate (Read 149 times)