Introduction

This article explains what the Funding Rate is, why it exists, and how it affects traders on Coinlocally Futures. The Funding Rate is a key mechanism that keeps perpetual contract prices aligned with the underlying asset’s spot price, ensuring a fair and stable trading environment.

What is the Funding Rate?

Funding refers to regular payments exchanged between long and short traders based on the current funding rate.

• When the funding rate is positive, long traders pay short traders.
• When the funding rate is negative, short traders pay long traders.

The funding rate is determined by two components:

• Interest rate (varies by exchange)
• Premium (difference between futures price and spot price)

These payments occur periodically and are designed to reduce the price gap between perpetual contracts and the underlying spot market.

Why is the Funding Rate important?

Perpetual contracts have no expiration date, meaning traders can hold positions indefinitely. To prevent the contract price from drifting away from the real market value, exchanges use the Funding Rate to:

• Encourage price convergence between perpetual contracts and the index price
• Maintain a stable and fair trading environment
• Prevent large price deviations caused by market imbalance

In short, the Funding Rate keeps perpetual contracts behaving similarly to spot markets.

How Funding Fees Work

Cross Margin Mode

• Funding fees are deducted directly from realized PNL.
• If the margin rate reaches the maintenance margin + closing fee rate, no additional funding fee is deducted.

Isolated Margin Mode

• Funding fees are first deducted from realized PNL.
• If realized PNL is insufficient, the remaining amount is taken from the position margin.
• If the margin rate reaches the maintenance margin + closing fee rate, no further deduction occurs.

How to find your Funding Fee

You can view funding rules, funding times, and fee details here:

https://futures.coinlocally.com/en_US/futuresData

Additional notes

• Funding fees are peer‑to‑peer; Coinlocally does not take any portion of these fees.
• The funding fee is calculated using the rate from one minute before the funding timestamp.
• The displayed funding rate reflects the last 8 hours of the premium index.
• Each trading pair has its own funding schedule, which may be adjusted during extreme price gaps.
• Due to settlement complexity, funding exchanges may take a few seconds to complete.

Common Issues

• Traders may be surprised when funding fees reduce their realized PNL.
• Not checking the funding schedule can lead to unexpected payments or receipts.
• Large gaps between Last Price and Mark Price may cause funding time adjustments.

Feeling lost?

If you’re unsure how funding works or how it affects your positions, our support team is available 24/7. Reach out anytime and we’ll help you understand your funding fees and manage your positions with confidence.

Updated on: 01/18/2026