TradingView's support guide to funding rates, checked on Oct. 10, 2026, defines the funding rate as a periodic payment between traders who hold perpetual futures positions. When the rate is positive, traders with long positions pay traders with short positions. When the rate is negative, shorts pay longs. The payment is a mechanism to help keep the contract price aligned with the spot price of the underlying asset.
Key facts from TradingView's guide
- Positive rate: Longs pay shorts.
- Negative rate: Shorts pay longs.
- Purpose: Helping keep the perpetual contract price aligned with the spot price.
- Basis: A percentage of the open position.
- Approximate formula: Interest rate plus premium index.
- Across exchanges: Rates usually differ from one venue to another.
How the rate is formed and why exchanges differ
TradingView expresses the funding rate as a percentage of your open position. Its approximate formula adds two parts: an interest rate and a premium index. The interest rate is a fixed component that reflects the cost of capital. The exchange usually sets it at its own discretion. The premium index is the relative premium or discount of the perpetual contract compared with the underlying index price. Some exchanges may apply proprietary adjustments to this formula. Funding rates therefore usually differ across exchanges.
Does your side pay or receive?
Your own payment depends on two things: the sign of the rate and the side you hold. Under TradingView's rule, a positive rate means a long position pays and a short position receives. A negative rate means the short pays and the long receives. The guide also links each sign to the side with stronger interest. Choose your side and the rate sign to see which way the payment runs.
Funding rate: does your side pay or receive?
Pick your position side and the funding rate's sign to see whether you pay or receive, and what the sign suggests about positioning.
Which side of a perpetual futures position do you hold?
- Long → next question
- Short → next question
Is the funding rate positive or negative?
- Positive → Your long position pays
- Negative → Your long position receives
Is the funding rate positive or negative?
- Positive → Your short position receives
- Negative → Your short position pays
With a positive rate, traders with long positions pay traders with short positions. TradingView links a positive rate with stronger long interest and contango.
Source: Funding rate: a guide to market sentiment (tradingview.com)With a negative rate, shorts pay longs. TradingView links a negative rate with stronger short interest and backwardation.
Source: Funding rate: a guide to market sentiment (tradingview.com)With a positive rate, traders with long positions pay traders with short positions. TradingView links a positive rate with stronger long interest and contango.
Source: Funding rate: a guide to market sentiment (tradingview.com)With a negative rate, shorts pay longs. TradingView links a negative rate with stronger short interest and backwardation.
Source: Funding rate: a guide to market sentiment (tradingview.com)It shows payment direction only under TradingView's general rule and does not reflect adjustments a specific exchange may apply.
What does a positive funding rate mean?
TradingView treats the sign as a reading of market sentiment. A positive rate points to stronger long interest and to contango. A negative rate points to stronger short interest and to backwardation.
How TradingView combines exchanges
TradingView also offers its own aggregated funding rate. It weights that combined figure by open interest. Markets with larger open interest get more weight in the result. A large venue can therefore move the aggregated number more than a small one.
What funding can cost you
Funding can work for or against a position, according to TradingView. A positive or negative rate can produce passive gains or additional costs. Those amounts can significantly affect large positions and positions held for a long time. A trader on the paying side meets that cost again at each periodic payment while the sign holds.
Analysis: reading funding as positioning context
The guide supports a two-part reading of any funding rate. The first part is practical: match the sign to your side to see whether you pay or receive. The second part is context: the sign hints at which side has stronger interest. That hint describes positioning. It does not tell you where the price will go next. Venue matters too. Because exchanges may adjust the formula, a reading on one exchange may not match another. An aggregated figure weighted by open interest leans toward the biggest markets. For a large or long-held position, the size of the payments deserves as much attention as the signal.
Analysis: a checklist for one funding reading
Steps for reading a funding rate
- Check the sign: Positive: longs pay shorts. Negative: shorts pay longs.
- Match it to your side: Decide whether your position pays or receives at the next payment.
- Note the exchange: Venues may adjust the formula, so compare readings from the same exchange.
- Check if it is aggregated: An average weighted by open interest leans toward larger markets.
- Weigh size and time: Funding gains and costs can significantly affect large or long-held positions.
Limitations and next step
TradingView's guide states no publication date, no current rate and no settlement schedule for any exchange, so a sign alone cannot give the dollar cost of a position. Its full text explains the formula, its two components and how the aggregated and single-exchange views work.
Sources: Funding rate: a guide to market sentiment (tradingview.com)
ZIPMEX promotes trading on trade.zipmex.com. Promotions are labelled and kept separate from news coverage, which is selected and checked without regard to them. Perpetual futures are leveraged derivatives. Prices can move fast and you can lose all of your margin. Not available in every jurisdiction. Not investment advice.
