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What is the funding rate?

The small periodic payment that keeps a perpetual's price in line with the spot market.

Because a perpetual never expires, something has to stop its price from drifting away from the underlying asset. That mechanism is the funding rate.

How it works

At regular intervals one side of the market pays the other. When the perpetual trades above spot, longs pay shorts; when it trades below spot, shorts pay longs. Those payments nudge the contract price back toward spot.

What it means for you

If you hold a position through a funding interval, you either pay or receive funding. In calm markets it is near zero; in strongly trending markets it can add up, so factor it into any longer hold.

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Demo clone โ€” this guide is original placeholder content, not Kalshi's, and is not financial advice. Trading perpetual futures involves risk, including the loss of collateral.