If you trade Perpetual Contracts on Bybit, the Funding Fee is a cost you must understand. Unlike trading commissions, the funding fee is not a standard fee collected by the exchange; rather, it is an amount exchanged between holders of Long and Short positions at a designated funding time. Bybit uses this structure to ensure that the price of perpetual contracts does not deviate excessively from the spot price.
Here is a summary of the key points:
| Situation | Funding Fee Payment Direction |
|---|---|
| Funding rate is positive (+) | Long → Short |
| Funding rate is negative (-) | Short → Long |
| Closing position before funding time | Generally no funding fee for that session |
| Holding position at funding time | Pay or receive funding fee |
| Funding rate | Can fluctuate in real-time |
| Funding interval | May vary by trading pair |
| Basic funding fee formula | Position Value × Funding Rate |
According to Bybit’s official help documentation, the funding rate can change continuously until the next funding time and is calculated every minute based on the Interest Rate and the Premium Index. Therefore, the funding rate displayed on the trading screen may not be a fixed number until the settlement time.
1. What is a Bybit Funding Fee?
The Bybit funding fee is an amount that long and short position holders periodically exchange with each other to keep the perpetual contract price close to the spot price.
Standard futures contracts have an expiration date. As the expiration date approaches, there is a structure where the futures price and spot price naturally converge.
On the other hand, perpetual contracts, as the name suggests, have no set expiration date. Therefore, without a separate adjustment mechanism, the futures price could consistently remain higher or lower than the spot price.
Bybit uses a funding mechanism to compensate for this.
For example, let’s assume that market demand for long positions is excessively strong, causing the perpetual contract to trade at a higher price than the spot price.
In this case, if the funding rate becomes positive:
Long position holder → Short position holder
The funding fee moves in this direction.
Conversely, if short position demand is strong and the perpetual contract price is discounted compared to the spot price, the funding rate can become negative, and:
Short position holder → Long position holder
The funding fee is paid in this direction.
In other words, it is inaccurate to simply understand the funding fee as a “cost paid to the exchange for futures trading.”
2. Funding Fees and Trading Commissions are Completely Different Costs
This is the part that beginners confuse the most.
Trading Fee and Funding Fee are different concepts.
| Category | Trading Fee | Funding Fee |
|---|---|---|
| Reason for occurrence | Order execution | Adjustment of discrepancy between perpetual contract and spot price |
| Timing of occurrence | At the time of trade execution | At the designated funding time |
| Payment recipient | Exchange | Counterparty position holder |
| Maker/Taker impact | Yes | No |
| Impact of position direction | Almost none | Very significant |
| Rate | Determined by account level, etc. | Fluctuates based on market conditions |
| Impact of holding duration | Little direct impact | Can accumulate the longer it is held |
According to official Bybit materials, futures trading fees are charged separately via Maker and Taker methods, while funding fees are classified as a separate cost exchanged between perpetual contract holders.
Therefore, when calculating the actual cost of futures trading, you should not just check the Maker/Taker fees.
Especially if you hold a position for several days or weeks, the funding fee can accumulate and become a larger cost than the trading commission.
3. Who Pays the Bybit Funding Fee to Whom?
This is the most important part.
When the Funding Rate is Positive
Long position holders pay the funding fee to short position holders.
Example:
- BTCUSDT Funding Rate: +0.01%
- Long position: Pay
- Short position: Receive
When the Funding Rate is Negative
Short position holders pay the funding fee to long position holders.
Example:
- BTCUSDT Funding Rate: -0.01%
- Long position: Receive
- Short position: Pay
Bybit’s official standard is the same.
At a Glance
| Funding Rate | Long | Short |
|---|---|---|
| +0.01% | Pay | Receive |
| +0.05% | Pay | Receive |
| -0.01% | Receive | Pay |
| -0.05% | Receive | Pay |
What is important here is the sign of the funding rate.
Just because the funding rate is high does not mean everyone pays more money. The opposite position can actually receive that amount.
4. How to Calculate Bybit Funding Fees
The most basic formula is very simple.
Funding Fee = Position Value × Funding Rate
Official Bybit help documentation also uses this formula for USDT and USDC perpetual contracts.
Example 1. 10,000 USDT Long + Funding Rate 0.01%
Position Value:
10,000 USDT
Funding Rate:
+0.01%
Calculation:
10,000 × 0.0001 = 1 USDT
Therefore, if you held the position at the funding time:
Long: Pay 1 USDT
Short: Receive 1 USDT
Example 2. 50,000 USDT Long + Funding Rate 0.05%
50,000 × 0.0005 = 25 USDT
If you have a long position, you pay 25 USDT.
Example 3. 50,000 USDT Short + Funding Rate 0.05%
Under the same conditions, if you have a short position, it is the opposite.
50,000 × 0.0005 = 25 USDT
The short position holder receives 25 USDT.
Example 4. When the Funding Rate is -0.03%
Position Value:
20,000 USDT
Funding Rate:
-0.03%
Absolute Amount:
20,000 × 0.0003 = 6 USDT
In this case:
- Long: Receive 6 USDT
- Short: Pay 6 USDT
is the result.
5. If Leverage is 10x, is the Funding Fee also 10x?
This question is very important.
The funding fee is calculated based on the Position Value, not the actual margin invested.
Therefore, as a result, if you increase leverage to create a larger position with the same margin, the funding fee will also increase.
For example, assume your equity is 1,000 USDT.
| Leverage | Position Value | 0.01% Funding Fee |
|---|---|---|
| 1x | 1,000 USDT | 0.10 USDT |
| 2x | 2,000 USDT | 0.20 USDT |
| 5x | 5,000 USDT | 0.50 USDT |
| 10x | 10,000 USDT | 1 USDT |
| 20x | 20,000 USDT | 2 USDT |
| 50x | 50,000 USDT | 5 USDT |
Therefore, you should not simply think, “The funding rate is only 0.01%, so it’s not a big deal.”
In leveraged positions, the actual funding fee burden relative to margin can be much larger.
6. How Large Can the Funding Fee Be Relative to Margin?
For example, assume you used 1,000 USDT as margin to take a 10x leverage position.
Position Value:
10,000 USDT
Funding Rate:
0.01%
Funding Fee:
1 USDT
Based on a margin of 1,000 USDT, a single funding fee corresponds to:
0.1%
of your margin.
If you assume the same funding rate and 8-hour interval simply continue, three times a day:
0.3%
is the level.
However, the actual funding rate can change each session, so you should not assume this value as a long-term cost. Bybit updates the funding rate every minute, and the interval and limits for each trading pair may also vary.
7. When is the Bybit Funding Fee Payment Time?
Many users know that “Bybit funding fees are paid every 8 hours.”
But to be precise:
The funding interval can vary by trading pair.
Official Bybit help documentation suggests the following times for contracts with an 8-hour interval.
- 00:00 UTC
- 08:00 UTC
- 16:00 UTC
Converted to Korea Standard Time (KST, UTC+9):
| UTC | Korea Standard Time |
|---|---|
| 00:00 UTC | 9:00 AM |
| 08:00 UTC | 5:00 PM |
| 16:00 UTC | 1:00 AM the next day |
Therefore, if it is a contract using an 8-hour funding interval, the typical funding times based on Korea Standard Time are 1:00 AM, 9:00 AM, and 5:00 PM.
However, you must be careful here.
Not all Bybit perpetual contract funding times are fixed at 1:00 AM, 9:00 AM, and 5:00 PM.
In practice, Bybit specifies that it may operate or change the funding interval for certain trading pairs to 4 hours or other durations, and in situations of extreme market volatility, it may switch the settlement interval to 1-hour increments for contracts where the funding rate has reached its upper or lower limits.
Therefore, before actual trading, you must check the following on the trading screen for the respective asset:
- Current funding rate
- Time remaining until the next funding
- Funding interval
You must verify these.
8. Can I avoid paying the funding fee if I close my position just before the funding time?
In principle, yes.
Bybit advises that only users holding a position at the time of funding will pay or receive the funding fee.
If you have completely closed your position before the funding time, no funding fee will be incurred for that session.
However, there is a very important exception to this.
Bybit explains that because it takes a few seconds for the funding fee settlement to be processed across the entire platform, it does not guarantee that you will be excluded from the settlement for that session if you open or close a position within approximately 5 seconds before or after the funding time.
Therefore:
Just because the funding time is 17:00, you should not assume that you can automatically avoid the funding fee by closing your position at 16:59:59.
If you are trading to avoid the funding fee, aiming for the few seconds right before settlement is not a reliable method.
9. Is it always advantageous to close a position because of the funding fee?
No.
Closing a position to avoid the funding fee may result in the following costs:
- Position closing trading fees
- Trading fees upon re-entry
- Slippage when using market orders
- Price increases or decreases before re-entry
- Loss of the original entry price
Therefore, simply following the approach of:
“I’m paying a funding fee soon, so I’ll just close it.”
may not be rational.
For example, if the funding fee is 3 USDT, but in the process of closing and re-entering the position:
- Liquidation trading fee of 2 USDT
- Re-entry fee of 2 USDT
- Slippage of 3 USDT
are incurred, you might end up increasing your costs instead of avoiding the funding fee.
You must calculate trading fees and funding fees as separate costs.
10. Why does the funding fee keep changing?
The Bybit funding rate is not a fixed value.
Based on the official calculation structure, the funding rate uses two main components:
- Interest Rate
- Average Premium Index
And these values are calculated every minute during the funding interval.
The official Bybit formula has the following structure:
Funding Rate = A value calculated based on the Average Premium Index and Interest Rate, with upper and lower limits applied.
General investors do not need to calculate the entire formula themselves.
What is important is:
The extent to which the perpetual futures price is at a premium or discount compared to the spot price affects the funding rate.
11. Does a positive funding rate always mean a bull market?
No.
A positive funding rate can generally be interpreted as a signal that there is strong demand for long positions or that the perpetual futures price is at a premium.
However:
Positive funding rate = Bitcoin will rise in the future
is not a valid formula.
A high positive funding rate could actually be a signal that long positions are overly crowded in the market.
Conversely, if the negative funding rate is strong, you might consider the possibility that short positions are excessively crowded.
Therefore, the funding rate is a reference material for interpreting market positioning, not an indicator that definitively predicts price direction.
12. Why do some people maintain long positions even when the funding fee is high?
For example, assume BTC is rising strongly and the funding rate is +0.05%.
Long holders have to bear the funding fee, but:
Expected price increase > Funding fee + Trading costs
If they judge this to be the case, they may continue to hold the position.
For example:
- Expected BTC increase: +5%
- Cumulative funding fee: 0.3%
- Trading costs: 0.1%
If this is the case, they may judge that the directional profit is much greater even if a funding fee exists.
Conversely, if the funding rate remains excessively high in a sideways market, the burden of holding the position for a long period increases.
13. If the funding fee is negative, is it always good because longs get paid?
This is also not true.
Even if you receive a funding fee, if the market price drops significantly, the position loss can be much greater than the funding fee profit.
For example:
- Long position value: 10,000 USDT
- Funding profit: +5 USDT
- Loss from BTC decline: -500 USDT
If this is the case, the fact that you received a funding fee has almost no impact on the overall result.
Therefore, receiving a funding fee can be a bonus profit element, but it does not hedge against directional risk.
14. Can Bybit funding fees affect the liquidation price?
Yes, depending on the situation.
Bybit first deducts the funding fee from the available balance.
However, if the available balance is insufficient, the funding fee may be deducted from the initial margin of the position. Especially in Isolated Margin, in this case, the liquidation price may move closer to the mark price, increasing the risk of liquidation.
For example:
- Holding an isolated margin position
- Almost no available USDT balance
- High funding fee incurred
- Funding fee deducted from position margin
If this happens, the margin available to sustain the actual position decreases.
In other words:
The funding fee is just a small cost and has nothing to do with liquidation.
You should not think this.
15. How should I view funding fees in Isolated Margin and Cross Margin?
Isolated Margin
Risk is managed based on the margin allocated to a specific position.
If the funding fee is deducted while the available balance is insufficient, it can affect the initial margin of the position, and Bybit advises that in this case, the liquidation price in isolated margin can move closer to the mark price.
Cross Margin
Positions share the available collateral in the account.
Therefore, you must consider not only the funding fee of a single position but also the entire account’s:
- Unrealized P&L
- Margin
- Collateral assets
- Other positions
together.
Especially if you hold multiple perpetual futures positions for a long time, the funding fees incurred for each position can accumulate.
16. Should UTA users be more careful about funding fees?
When using Bybit’s Unified Trading Account (UTA), because positions and collateral assets are managed at the account level, you should not view the funding fee simply as a small cost for one position.
For example:
- BTCUSDT Long
- ETHUSDT Long
- SOLUSDT Long
If you hold these simultaneously and all are incurring positive funding fees, funding fees can be repeatedly deducted from each position.
If you maintain positions for a long time:
Total Funding Fee = Sum of funding fees for each position × Number of actual payment intervals
You must manage cumulative costs in this form.
17. Funding fee calculation for USDT perpetual contracts
For USDT perpetual contracts, Bybit calculates the position value in the following way:
Position Value = Contract Quantity × Mark Price
And:
Funding Fee = Position Value × Funding Rate
is the formula.
For example:
- BTC Quantity: 1 BTC
- Mark Price: 100,000 USDT
- Funding Rate: 0.01%
If so:
1 × 100,000 = 100,000 USDT
Funding fee:
100,000 × 0.0001 = 10 USDT
is the result.
If the funding is positive, the long pays 10 USDT and the short receives it.
18. Is the calculation method the same for USDC perpetual contracts?
The basic structure is the same.
According to Bybit’s official help, for USDC perpetual contracts as well:
Funding Fee = Position Value × Funding Rate
and:
Position Value = Contract Quantity × Mark Price
is used for calculation.
However, there is a difference in that the settlement asset is USDC.
19. The funding fee calculation for Inverse Perpetual is different
For inverse perpetual contracts, the position value calculation method is different.
The official Bybit calculation is:
Position Value = Contract Quantity ÷ Mark Price
And:
Funding Fee = Position Value × Funding Rate
is the formula.
In the official Bybit example:
- BTCUSD Contract Quantity: 10,000
- Mark Price: 8,000 USD
- Funding Rate: 0.01%
When:
10,000 ÷ 8,000 = 1.25 BTC
Funding fee:
1.25 × 0.01% = 0.000125 BTC
is calculated.
Therefore, you should not calculate USDT perpetual and inverse perpetual in the same way.
20. Is the funding fee calculated based on the entry price?
No.
For USDT and USDC perpetual contracts, Bybit uses the Mark Price to calculate the position value.
Therefore:
- Even if you entered BTC at 90,000 USDT,
- If the Mark Price at the time of funding is 100,000 USDT,
The position value used for the funding calculation may vary based on the Mark Price at the time of funding.
21. Why the Mark Price is important
Bybit uses the Mark Price of perpetual contracts for liquidation and unrealized P&L calculations.
The Mark Price is calculated not just by using Bybit’s last traded price, but by incorporating the Index Price, which reflects global spot prices, and the funding basis.
Therefore:
- Last Traded Price
- Index Price
- Mark Price
may not be exactly the same price.
To understand funding fee calculations and the liquidation structure, it is recommended to also understand the concept of Mark Price.
22. When is the Bybit funding rate finalized?
The next funding rate displayed on the trading screen can change until the funding time.
Bybit states that the funding rate is updated every minute based on the Interest Rate and Premium Index.
In other words, even if it currently shows:
Next Funding Rate: 0.01%
there is no guarantee that it will be exactly 0.01% at the actual time of funding.
In particular, as the market rises or falls sharply and the price gap between futures and spot widens, the funding rate can also change rapidly.
23. Why is movement important as the funding settlement approaches?
Bybit’s Average Premium Index uses a weighted average structure rather than a simple average.
According to official documentation, a higher weight is applied to the Premium Index as the funding interval progresses.
Therefore, if the price divergence between spot and perpetual futures widens significantly just before funding, it can have a greater impact on the final funding rate.
For this reason, it is risky for traders to calculate costs definitively based only on the expected funding rate from a few hours prior.
24. Are there upper and lower limits for the funding rate?
Yes.
Bybit applies an Upper Limit and a Lower Limit to the funding rate.
In general situations, these limits are calculated based on the following for the respective asset:
- Initial Margin Rate (IMR)
- Maintenance Margin Rate (MMR)
etc.
However, the important point is that these limits are not permanently fixed.
Bybit states that it may adjust funding rate limits and settlement cycles based on market conditions, and that future changes may be applied dynamically without separate notice.
25. If the funding fee becomes too high, it may be charged every hour
It is possible.
Under Bybit’s official policy, if the funding rate for a specific perpetual contract reaches the set upper or lower limit, the funding settlement frequency for that contract may be changed to once per hour.
In fact, there have been cases in 2026 where the funding cycle for some trading pairs was adjusted to 4 hours.
Therefore, when trading altcoin futures:
“Bybit always charges funding fees every 8 hours.”
should not be assumed.
26. Why altcoins with high funding fees are risky
Compared to Bitcoin or Ethereum, altcoins:
- May have lower liquidity,
- May have higher price volatility, and
- Long or short positions can easily become one-sided.
In this case, the funding rate can become abnormally high.
Especially for low-liquidity assets:
Directional loss + High funding fee + Slippage
can occur simultaneously.
Therefore, it is risky to enter an opposite position in assets with extreme funding rates simply because you are “receiving the funding fee.”
27. Is a strategy targeting only funding fees possible?
It is possible, but more complex than commonly thought.
A representative method is the delta-neutral funding fee strategy.
For example:
- Buy spot BTC
- Short the same amount of BTC perpetual futures
- Receive positive funding fees
structure can be created.
Theoretically, this is a method of receiving funding fees while largely offsetting the direction of price increases and decreases.
However, in reality, you must consider the following:
- Spot trading fees
- Futures trading fees
- Slippage
- Funding rate changes
- Funding rate turning negative
- Spot/futures price divergence
- Collateral risk
- Forced liquidation risk
- Capital efficiency
- Rebalancing costs
Therefore, receiving funding fees does not mean it is a risk-free profit.
28. Will I always make money if I short with a high funding rate?
No.
For example, assume the funding rate is +1% and the short position receives the funding fee.
It looks very attractive.
However, if that coin surges 20% before or after the funding settlement:
+1% funding profit
is much smaller than
-20% directional loss
If you used leverage, the loss can be felt even more significantly, and there is even a possibility of liquidation.
Therefore, a high funding fee should be viewed as compensation for position imbalance in the market, not as “free money.”
29. How to reduce funding fees
While there are limited ways to completely eliminate funding fees, they can be managed.
1) Check the current funding rate
Check the next funding rate before entering a position.
2) Check the next funding time
For short-term trades, it is worth checking if it is just before or after funding.
3) Calculate the expected holding period
The importance of funding costs varies completely depending on whether the position is held for a few hours or for several days.
4) Adjust leverage
High leverage creates a larger position with the same equity, which can increase the funding fee burden relative to the margin.
5) Avoid trading pairs with extreme funding fees
Especially for low-liquidity altcoins, the funding fee itself can be a major risk factor.
6) Calculate trading fees together
Closing and reopening a position to avoid funding fees might actually be more expensive.
30. Example of long-term funding fee accumulation
Let’s assume you hold a long position of 20,000 USDT.
If we simply assume that the funding rate is 0.01% each time and it is settled every 8 hours:
One session:
20,000 × 0.01% = 2 USDT
3 times a day:
6 USDT
7 days:
42 USDT
30 days:
180 USDT
is the result.
However, this calculation is merely based on the assumption that the funding rate remains at 0.01% for the entire month.
In reality, Bybit’s funding rate changes constantly; it can switch from positive to negative, and the funding cycle of the trading pair itself can change.
This example is a calculation to show that funding fees can accumulate in long-term positions.
31. Why the funding fee was deducted more than expected
This is the most common situation from an actual user’s perspective.
Possible reasons are as follows:
The position value was larger than expected
Funding fees are calculated based on position value, not margin.
Used high leverage
The position value may have increased due to leverage.
Funding fees occurred in multiple positions simultaneously
If you held multiple contracts such as BTC, ETH, SOL, etc., funding fees may have occurred for each.
The funding rate increased just before funding
The expected funding rate can change until the settlement time.
It was an asset with a short funding cycle
Some assets may use a 4-hour or other cycle instead of 8 hours. It may also be adjusted shorter depending on market conditions.
32. Where can I check funding fee records?
In Bybit UTA, you can check the funding fee payment/receipt history in the trade records.
According to official Bybit guidance, on the web:
Orders → Unified Trading Order → Futures → Trade History
You can check it by setting the Filled Type to Funding.
Or:
UTA Transaction Log → Funding Rate Settlement
can also be used to check.
Bybit advises that in the records:
- Fee Rate is positive and Fee is positive → Funding fee paid
- Fee Rate and Fee are negative → Funding fee received
may be displayed in this manner.
33. You can also receive funding fee notifications in the Bybit app
You can use the Funding Fee Reminder feature in the Bybit app.
According to official help, you can receive an expected funding rate notification about 30 minutes before the funding time in the app.
The general access path is:
Trade → Notification icon in the top right → Strategy Alert → Funding Fee Reminder
is the path.
Also, in the Funding Rate area of the trading page, you can set notifications for when the rate goes outside a specified range or reaches a certain limit.
This is a quite useful feature for users who maintain futures positions for a long period.
34. How to calculate funding fees and futures trading costs together
In futures trading, it is recommended to view the actual costs by dividing them into at least the following three categories.
Total Cost ≈ Entry Trading Fee + Exit Trading Fee + Accumulated Funding Fee
In addition, if you are using market orders, you must also consider slippage.
For example:
- Position Value: 50,000 USDT
- Entry Fee: 25 USDT
- Exit Fee: 25 USDT
- Accumulated Funding Fee: 100 USDT
Then the actual direct cost is:
150 USDT
.
Among these, the funding fee can be the largest cost.
In particular, for short-term scalpers, the proportion of trading fees is high, while for swing and position traders who hold positions for several days or more, the proportion of funding fees can be relatively larger.
35. Funding Fees and Break-Even Point
Funding fees change the actual break-even point.
For example:
- Long Entry Price: 100,000 USDT
- Position Value: 100,000 USDT
- Accumulated Funding Fee: 100 USDT
- Total Trading Fees: 100 USDT
Then the total cost is 200 USDT.
Therefore, even if you close the position at 100,000 USDT, which is the same as the entry price, it is effectively a loss.
For long-term futures holding:
Price P&L + Funding Fee + Trading Fees
must be calculated together to determine the actual rate of return.
36. Are Funding Fee and Funding Rate different terms?
Strictly speaking, they are different.
Funding Rate
This is the rate applied to the position value.
Example:
0.01%
Funding Fee
This is the actual amount paid or received.
Example:
10 USDT
Therefore:
Funding Fee = Position Value × Funding Rate
.
37. What should you check when you see a high Funding Rate?
If the funding rate rises significantly higher than usual, it is recommended to check the following.
| Check Item | Reason |
|---|---|
| Funding Rate Sign | Determine who pays |
| Next Funding Time | Determine actual payment |
| Current Position Value | Calculate actual amount |
| Funding Interval | Check frequency per day |
| Futures-Spot Basis | Reference for overheating |
| Open Interest | Reference for position concentration |
| Leverage | Check liquidation risk |
| Liquidity | Check risk of volatility/slippage |
Rather than deciding on a position based solely on the funding fee, it is better to look at it in conjunction with the overall market structure.
38. If the Funding Fee is 0%, are there no costs?
If the funding rate is exactly 0% for that funding interval, the funding fee itself may not occur.
However, futures trading still involves:
- Trading Fees
- Slippage
- Liquidation Risk
- Other Trading Costs
.
Therefore:
Funding Fee 0% ≠ Futures Trading Cost 0
.
39. Do Expiry Futures also incur Funding Fees?
Bybit’s Expiry Contracts, which are futures contracts with an expiration date, do not apply the same funding mechanism as perpetual contracts.
The official Bybit FAQ also explains that while perpetual contracts have funding fees, Expiry Contracts do not, which is a key difference.
Therefore, if you plan to hold a position for a long period, Expiry Futures might be advantageous in terms of funding fees alone, but other conditions such as expiration, basis, and liquidity must also be considered.
40. Check Referral Code before signing up for Bybit
If you do not have a Bybit account yet, it is recommended to check if the referral code has been applied correctly before completing your registration.
Bybit Registration Link
Sign up via Bybit BYBITDC Partner Link
Referral Code
BYBITDC
Promotions, trading fee benefits, and new user rewards linked to registration links or referral codes may vary depending on the country, time of registration, account status, and ongoing events. Therefore, it is accurate to check the actual conditions displayed on the registration screen rather than assuming that a specific discount rate or bonus will always apply.
Affiliate Disclosure: The link above is a partner link. If you sign up or trade through this link, the site operator may receive a commission. The actual benefits applied to the user may vary depending on Bybit’s policies and promotional terms at the time.
41. The 7 Most Important Things When Managing Bybit Funding Fees
There is no need to overcomplicate the funding fee structure.
In practice, checking these seven points can help you avoid most mistakes.
- Check the + / – of the Funding Rate
- Check if you are Long or Short
- Check Position Value
- Check Next Funding Time
- Check the Funding Interval for the asset
- Calculate accumulated costs for the expected holding period
- Compare costs against closing/re-entering to avoid funding fees
Especially when using leverage, remember that funding fees must be calculated based on the actual position value, not the margin.
42. Most Common Funding Fee Mistakes by Beginners
“It’s only 0.01%, so it’s basically free”
If the position value is large or the position is held for a long time, it can become a significant amount.
“Shorts always receive funding fees”
No. If the funding rate is negative, shorts pay.
“Longs always pay funding fees”
No. In negative funding, longs receive.
“It always happens every 8 hours”
The interval can vary by trading pair.
“Closing 1 second before funding always avoids it”
Bybit does not guarantee that trades within approximately 5 seconds before or after the funding time will be included in that settlement cycle.
“The exchange takes the funding fee”
In a standard funding mechanism, it is exchanged between long and short traders.
43. FAQ: Frequently Asked Questions about Bybit Funding Fees
What is the Bybit Funding Fee?
The Bybit funding fee is an amount exchanged between long and short position holders at a set time to keep the perpetual futures price close to the spot price. It is a cost distinct from regular trading fees.
Who pays if the funding fee is positive?
In a positive funding fee, long position holders pay short position holders.
Who pays if the funding fee is negative?
In a negative funding fee, short position holders pay long position holders.
When does the Bybit funding fee occur?
For contracts using an 8-hour funding interval, settlement occurs at 00:00, 08:00, and 16:00 UTC. However, since funding intervals can vary by trading pair, you should check the next funding time on the actual trading screen.
Does the funding fee always occur every 8 hours?
No. Funding intervals can vary by trading pair, and in extreme market conditions, the settlement frequency may change.
What is the funding fee calculation formula?
The basic formula is:
Funding Fee = Position Value × Funding Rate
.
Does higher leverage increase the funding fee?
Funding fees are calculated based on position value, not margin. Therefore, if you use higher leverage with the same capital to increase your position size, the actual funding fee amount may also increase.
If I close my position just before funding, do I not pay the fee?
In principle, if you close your position completely before the funding time, you will not pay or receive the funding fee for that cycle. However, Bybit does not guarantee that orders within approximately 5 seconds before or after the settlement time will be excluded from that cycle.
Can funding fees affect liquidation?
Yes. If available balance is insufficient, funding fees may be deducted from the initial position margin, and Bybit explains that for isolated margin, the liquidation price may move closer to the mark price.
Is the funding rate fixed in advance?
No. The next funding rate can change until the funding time, and Bybit calculates it every minute based on interest rates and the premium index.
Is it advantageous to go short if the funding rate is high?
It may be advantageous in terms of receiving funding fees, but if the price rises, the loss on the short position could be much greater than the funding profit. Therefore, it is risky to decide on a directional position based solely on the funding rate.
Where can I check my Bybit funding fee history?
You can set the Filled Type to Funding in the UTA Futures Trade History or check the Funding Rate Settlement entry in the Transaction Log.
What is the Bybit referral code?
The referral code provided in this article is:
BYBITDC
.
Registration Link:
Sign up for Bybit with BYBITDC
It is recommended to check if the code is applied and verify the promotional terms offered at the time before completing your registration.
44. Final Summary
Bybit funding fees are periodic payments made between long and short position holders to keep the price of perpetual futures close to the spot market.
The core structure is very simple.
Positive funding rate → Longs pay Shorts
Negative funding rate → Shorts pay Longs
And the actual funding fee is calculated as:
Position Value × Funding Rate
.
However, in practice, the following factors are more important than this simple formula:
- The funding rate is not fixed.
- Funding intervals may vary by trading pair.
- You must hold a position at the funding timestamp to be eligible to pay or receive the fee.
- High leverage can increase the funding fee burden relative to your margin.
- Accumulated funding fees can significantly reduce the net return of long-term positions.
- A high funding rate does not guarantee the future direction of the price.
- Frequent liquidation and re-entry to avoid funding fees also incur costs.
- Insufficient available balance can increase the risk of liquidation in isolated margin.
Therefore, in Bybit futures trading, it is important not only to check the “entry and liquidation prices” but also to view:
Trading Fees + Funding Fees + Leverage + Position Value + Holding Period
as a single cost structure.
If you are planning to create a new Bybit account, you can also check if a referral code is applied before completing your registration.
Referral Code: BYBITDC
Registration Link: Bybit BYBITDC Partner Link
Benefits and promotional conditions may change depending on the time and region, so please verify the conditions displayed on the actual registration screen.
Disclaimer: This content is for informational purposes to explain Bybit perpetual futures and the funding mechanism and does not constitute investment advice. Cryptocurrency derivatives and leveraged trading carry the risk of total loss of principal and forced liquidation. Funding rates, funding intervals, contract terms, and available regions are subject to change; please check the Bybit trading interface and official help center before trading.
