Binance is a cryptocurrency exchange with a focus on the Chinese market and other Chinese coins. Binance was founded in 2017 and quickly rose to become the largest cryptocurrency exchange in the world by trading volume.
What is Funding Rate?
The funding rate is the fee that long or short positions pay to borrow or lend an asset. This fee is paid to the funding provider, who is generally the party with the opposite position.
The funding rate can be positive or negative, depending on the direction of the position and the prevailing interest rates. .
A long position pays funding if the interest rate is positive, while a short position pays funding if the interest rate is negative. If the funding rate is positive, it means that shorts pay longs.
If the funding rate is negative, it means that longs pay shorts.
The funding rate is calculated every 8 hours and paid out every 24 hours. The calculation is based on a weighting of the past 4 hours of trading activity, with more weight given to recent activity.
In order to avoid payingfunding fees, traders can move their positions to another exchange that does not have a funding fee or they can close their positions before the 8-hour mark.
Some traders see funding fees as an opportunity to make profit from other traders who are not aware of them. By opening a position at one exchange and then closing it at another exchange before the 8-hour mark, traders can earn the difference in funding rates.
What Is Funding Rate in Binance?The Funding Rate in Binance is calculated every 8 hours and paid out every 24 hours.
The Funding Rate can be positive or negative, depending on the direction of the position and the prevailing interest rates.