Perpetual futures have no expiry, so an exchange uses a funding rate to keep their price tethered to spot. At each funding interval (often every 8 hours), one side pays the other a small percentage. A positive funding rate means longs pay shorts — typical when the perp trades above spot because longs are crowded; a negative rate means shorts pay longs.
Traders read funding as a sentiment and crowding gauge. Persistently high positive funding signals an over-leveraged long side that is vulnerable to a long squeeze, and vice versa. It is also a real cost: holding a position through funding either earns or pays that rate.
Example
BTC perp funding sits at +0.05% per 8h while price runs above spot — longs are paying to stay in, a sign the rally is crowded.
How Noon Barbari uses Funding Rate
Every concept here is implemented in the platform. Open the relevant docs or tool to see it in action.
See perps data in noonbarbari →Related terms
- General
Open Interest
The total number of derivative contracts currently open and not yet settled.
- General
Long/Short Ratio
The proportion of traders (or position value) that is long versus short on an asset.
- General
Long
A position that profits when price rises. To 'go long' = to buy.
- General
Short
A position that profits when price falls. To 'short' = to sell first, buy later.