Negative funding rates: when shorts pay longs

On most perpetuals, most of the time, funding is positive: longs pay shorts to hold their positions. When it turns negative, the payments turn round. Shorts pay longs, and holding a long earns funding instead of costing it. It tends to happen on some markets and some exchanges and not others, so it's worth knowing where to look: the perpetuals index shows every exchange's rate for every coin, and picks out the best place to hold each side.

What does a negative funding rate mean?

A perpetual never expires, so funding is what keeps its price near the coin's spot price. When the perpetual trades above spot, funding is positive and longs pay shorts, which makes a long dearer to hold and pulls the price back down. When it trades below spot, funding is negative and shorts pay longs, which pulls it back up.

So a negative rate says the perpetual is trading below spot on that exchange: its traders are keener to be short than long, at least for now. The further below zero, the more the shorts are paying to stay short.

Funding is paid on a position's full size, not the margin behind it. A $10,000 position held with $2,000 of margin, at 5 times leverage, pays or is paid funding on the $10,000.

Why does funding go negative?

• Traders betting on a fall. After a sharp drop, or ahead of news, traders who expect more pile into shorts.
• Hedging. Someone holding a coin can short its perpetual to protect against a fall without selling the coin. That's a short that will pay a little to stay open.
• Longs leaving in a hurry. Longs closing, or being liquidated, sell the perpetual, and it can trade below spot until they're done (crypto liquidations explained).
• One exchange's traders. Each exchange's rate comes from its own traders, so funding can be negative on one and positive on the rest. At 13:48 UTC on 2 October 2026, Bitcoin's paid −8.93% a year on OKX, where shorts paid longs, while the other ten exchanges compared were all above zero, from +0.44% on Gate to +12.72% on Deribit by Coinbase (funding rates, side by side).

What it pays, and what it costs

Example figures, not market data. What's paid is the rate at each payment, on the position's size, and the rate changes as the market does.

• For a long, it's income, but small beside the price. −15% a year is about 0.04% a day, so a price move of 0.05% against the position takes back more than a day of it.
• For a short, it's a running cost, paid on top of whatever the price does, for as long as the rate stays below zero.
• With leverage, it's bigger beside the margin. At 5 times leverage, 15% a year on the position is 75% a year on the money behind it.
• Between exchanges, it's a gap. When funding is negative on one exchange and positive on another, a long on the first and a short on the second are both paid: that's the funding spread trade.

How to find negative funding on the site

1. Open the perpetuals index. Each exchange's column is its funding a year for every coin, and a minus sign means shorts are paying longs there.
2. With Long chosen at the top, the cell picked out in each row is the cheapest place to hold a long: the lowest rate. Where that's below zero, a long is paid there. Choose Short and it picks out the highest rate instead, where a short is paid most.
3. Sort by Funding flow/hr, lowest first (this link does it). The coins where shorts pay longs the most money an hour, across the exchanges you have on, come first.

To see whether it's new or the market's normal, choose 7-day avg beside Funding: a coin whose week averages below zero has paid its longs all week, and Δ to current funding shows funding now beside it (funding rate spikes). On a coin's perpetuals page, Funding history charts how long each exchange has been below zero, over 7 or 30 days (funding rate history).

What negative funding doesn't tell you

• That the price will rise. Shorts paying to stay short expect a fall, and they may be right.
• What you'll be paid. For most exchanges the rate now is the one the next payment will be charged at, worked out as they go, so the payment can come out different. The one after it depends on the market then.
• That it will last. Negative funding pulls the perpetual back toward spot, which is what brings funding back up. A market where it has stayed below zero for days, though, has a lot of shorts holding on: what a short squeeze feeds on.

Not financial advice. Rates move while you read them.