Use negative sign for negative rates (e.g., -0.02)
Notional Position Value:–
Funding Status:–
Estimated Fee:–
function calculateFunding() {
var side = document.getElementById('posSide').value;
var amount = document.getElementById('coinAmount').value;
var price = document.getElementById('markPrice').value;
var rate = document.getElementById('fundingRate').value;
var resultDiv = document.getElementById('bfrResult');
var resNotional = document.getElementById('resNotional');
var resStatus = document.getElementById('resStatus');
var resFee = document.getElementById('resFee');
// Validation
if (amount === "" || price === "" || rate === "") {
alert("Please fill in all fields.");
return;
}
var amountNum = parseFloat(amount);
var priceNum = parseFloat(price);
var rateNum = parseFloat(rate);
if (isNaN(amountNum) || isNaN(priceNum) || isNaN(rateNum)) {
alert("Please enter valid numbers.");
return;
}
// Calculation
// Nominal Value = Quantity * Mark Price
var nominalValue = amountNum * priceNum;
// Funding Fee = Nominal Value * Funding Rate (percentage converted to decimal)
var rawFee = nominalValue * (rateNum / 100);
var absoluteFee = Math.abs(rawFee);
// Logic for Pay vs Receive
// Long pays Short if Rate is Positive
// Short pays Long if Rate is Negative
var action = "";
var actionClass = "";
if (side === "long") {
if (rateNum > 0) {
action = "YOU PAY";
actionClass = "bfr-pay";
} else {
action = "YOU RECEIVE";
actionClass = "bfr-receive";
}
} else {
// Short Position
if (rateNum > 0) {
action = "YOU RECEIVE";
actionClass = "bfr-receive";
} else {
action = "YOU PAY";
actionClass = "bfr-pay";
}
}
if (rateNum === 0) {
action = "NO FEE";
actionClass = "";
absoluteFee = 0;
}
// Formatting Output
resNotional.innerHTML = "$" + nominalValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resStatus.innerHTML = "" + action + "";
resFee.innerHTML = "$" + absoluteFee.toLocaleString(undefined, {minimumFractionDigits: 4, maximumFractionDigits: 4});
resultDiv.style.display = "block";
}
Understanding Binance Funding Rate Calculations
In the world of cryptocurrency perpetual futures, the funding rate is a critical mechanism that ensures the contract price stays pegged to the spot price of the underlying asset. Unlike traditional futures which have an expiration date, perpetual contracts can be held indefinitely. The funding fee is the payment exchanged between long and short traders to maintain this balance.
How the Formula Works
The calculation for the funding fee on Binance and most other major exchanges follows a standard formula:
Funding Fee = Nominal Value of Position × Funding Rate
Where:
Nominal Value: This is your Position Size (in coins) multiplied by the current Mark Price. Note that leverage does not directly change the formula, but it allows you to hold a larger nominal value with less capital.
Funding Rate: This represents the difference between the perpetual contract price and the spot price, plus a velocity component. It is usually expressed as a percentage (e.g., 0.01%).
Who Pays Whom?
The direction of payment depends on whether the funding rate is positive or negative and whether you hold a long or short position.
Positive Funding Rate (> 0%): The market is bullish. Long traders pay Short traders.
Negative Funding Rate (< 0%): The market is bearish. Short traders pay Long traders.
Why This Matters for Traders
For high-frequency traders or those holding large positions over time, funding fees can significantly impact profitability. On Binance, funding payments typically occur every 8 hours (at 00:00, 08:00, and 16:00 UTC). If you close your position before the timestamp, you generally do not pay or receive the funding fee for that interval.
Frequently Asked Questions
1. Does Binance charge the funding fee?
No. Funding fees are peer-to-peer payments. Binance takes no cut from these fees; they are transferred directly between users holding long and short positions.
2. How often does the funding rate change?
The rate is calculated in real-time but is usually settled every 8 hours. However, in times of extreme volatility, the rate can fluctuate significantly.
3. Can I lose money purely on funding fees?
Yes. If you hold a large leveraged position against the market trend for a long period (e.g., holding a Long position during a strong bull run where rates are high), the accumulated funding fees can eat into your margin.