Understanding Funding Rates
When crypto perpetual markets turn heavily bullish, long traders must pay a regular funding fee to short sellers every 8 hours. During strong bull cycles, these funding rates frequently exceed 0.05% per 8 hours—translating to over 35% annualized APR.
By buying 1 spot Bitcoin and simultaneously shorting 1 perpetual Bitcoin contract on Binance, your delta exposure is exactly zero. You collect the funding payments 3 times a day regardless of whether Bitcoin surges or dumps.