ETH Perpetual Funding Fees: Calculate the Cost of Holding a Position

An ETH perpetual funding payment is a periodic transfer associated with an open perpetual position. Its amount depends on the applicable rate and position value at settlement. It is separate from the fees paid to execute a trade and does not guarantee a profitable carry strategy.

Start with position value

For a linear ETH/USDT contract, a simplified funding calculation is position value × funding rate. Position value is the ETH quantity multiplied by the mark price under the applicable contract rules. Use the absolute size to calculate the payment amount, then determine whether the side pays or receives.

OrangeX.com’s funding information explains the mechanism. A positive rate normally means longs pay shorts; a negative rate reverses the direction. Check the live contract’s settlement time, rate and rules instead of assuming one schedule applies permanently.

Calculate a hypothetical settlement

Suppose a position is 2 ETH, mark price is 3,000 USDT and the applicable rate is 0.01%. Its value is 2 × 3,000 = 6,000 USDT. The funding amount is 6,000 × 0.01% = 0.60 USDT.

At that positive rate, the long pays and the short receives under the normal mechanism. If the rate were -0.01%, the direction would reverse. These numbers are hypothetical and do not represent today’s ETH price, rate or settlement terms.

Distinguish margin from exposure

If the position uses 600 USDT of initial margin in a simplified 10× example, the funding calculation still uses the 6,000 USDT position value, not just the 600 USDT margin. The 0.60 USDT payment equals 0.1% of that illustrative margin.

Leverage does not multiply funding twice. Holding the same quantity with a different margin amount changes the payment relative to capital committed, while the position-value calculation remains the relevant starting point. Account settings, collateral and risk rules can change the real margin requirement.

Model more than one settlement

If the same value and rate applied for 3 settlements, the total would be 1.80 USDT. Real rates and mark prices can change, so a displayed estimate should not be multiplied into a guaranteed weekly return or cost.

Keep a settlement log recording time, rate, position value, side and actual payment. The ETH perpetual market provides contract context; access and available products depend on account and region.

Include the remaining risks

Opening and closing fees, spread and slippage can outweigh a funding receipt. A short receiving funding still loses if ETH rises sufficiently, and a hedged arrangement can retain liquidation, execution and counterparty risks. Closing near a settlement boundary does not guarantee avoiding a payment.

Review the fee schedule and maintain a margin buffer. Do not treat funding income as a substitute for measuring the position’s full risk.

Common questions

Is funding calculated only on deposited margin?

No. In this example it is calculated on position value.

Is the displayed estimated rate locked in?

No. Check the rate actually applicable to settlement and the resulting payment record.

Does receiving funding guarantee a net profit?

No. Price changes and other costs can exceed the receipt.