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Frequently Asked Questions

Q. Who pays the funding rate to whom?

It's paid directly between long and short position holders, not to the exchange. When the futures price is above spot, longs pay shorts; when below, shorts pay longs.

Q. What should I do when the funding rate is unusually high?

Be cautious about adding to a position in the same direction while funding is abnormally elevated, and if holding long-term, always factor funding into your P&L calculation.

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