# Funding Rate Explained: Who Pays Whom in Perpetual Futures

> The funding rate sets the periodic payment between traders in a perpetual futures contract: when positive, longs pay shorts; when negative, shorts pay longs. On Binance rounds usually occur every 8 hours and the fee goes to the other side, not the exchange.

Last updated: 2026-10-22 · https://www.nx24.ai/en/rehber/fonlama-orani-funding-rate

## What is the funding rate?

The funding rate sets the periodic payments between traders holding perpetual futures positions; these payments are called funding fees. The rate is based on the price difference between the perpetual contract and the underlying spot price [1].

## Who pays whom?

When the rate is positive (contract price above spot) long holders pay short holders; when it is negative (contract price below spot) short holders pay long holders [1]. According to Binance, the funding fee is not paid to the exchange but between traders [1].

## How often is it paid?

According to Binance, funding rounds usually occur every 8 hours and the interval can be shorter in periods of high volatility [1]. Only positions open at the funding round are charged; with no position at that moment no fee applies. Holding a position overnight can mean several payments [1].

## Cap and floor

According to Binance, a cap and floor limit the funding fee charged in a single round. For the current rate and funding times, check the exchange's own page [1].

## Why it matters

Funding turns into a cost, or income, of holding a position: if the rate direction is against the position, the trader pays every round. The effect is small in short trades but can add up in positions held for a long time. The sign of the rate is not a direction indicator on its own.

## Disclaimer

Funding rates change over time; check the exchange's own page for the current rate. This page is educational, not investment advice.

## Frequently asked questions

**Who pays when the funding rate is positive?**

When the rate is positive, long holders pay short holders; when negative the reverse applies [1].

**How often is funding paid?**

According to Binance, rounds usually occur every 8 hours and can be shorter in high volatility. Only positions open at that moment are charged [1].

**Does the exchange collect the funding fee?**

No; Binance states that the funding fee is paid between traders, not to the exchange [1].

## Sources

1. [What Are Funding Fees in Binance Futures?](https://www.binance.com/en/blog/futures/what-are-funding-fees-in-binance-futures-6595842576313788144). Binance Blog. Accessed: 2026-10-22.

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