Bybit

Bybit funding rates determine payments between perpetual position holders at settlement

Bybit funding rates determine whether an open perpetual position pays or receives a settlement payment. A positive rate makes longs pay shorts; a negative rate reverses that direction. The payment depends on the position value at settlement and the rate applied for that funding cycle. Each contract has its own interval, so holding costs depend on which settlements the position crosses. The displayed rate can change before settlement. Linear and inverse contracts also measure position value differently.

The short version: Changing leverage alone leaves the funding payment unchanged when position size, mark price, and the settled rate remain constant.

Position Value, Funding Rate, and Available Balance

A perpetual position participates in funding when it remains open at settlement, with its value providing the payment basis. The funding rate expresses the transfer relative to that value. The rate’s sign and position direction determine whether the account pays or receives it. Available balance supplies funds for a payable amount, with margin consequences if that balance is insufficient. A settlement can therefore change account funds while the contract position stays open. The funding payment itself does not buy additional contracts or reduce position quantity.

Funding transfers money between long and short position holders. Bybit administers the exchange without retaining the payment as a trading fee.

Premium, Interest, and Price Alignment

Standard perpetual funding combines an interest component with a premium measurement to encourage contract prices to track the underlying spot market. Perpetuals have no scheduled expiry forcing that convergence. Charging one side and paying the other changes the economics of maintaining each direction of exposure.

The Interest Component

The standard interest calculation uses a 0.03% daily basis, scaled to the funding interval in hours. For an interval of h hours, its calculation is I = 0.03% / (24 / h). Some contracts instead use a zero interest component. This input does not establish the final funding rate by itself, because the premium and contract limits also enter the calculation.

Order-Book Premium Measurements

The premium index compares impact bid and ask prices with the spot index price. Impact prices are average execution prices for a configured notional amount on each order-book side. They reflect depth across orders, so the latest individual trade cannot reproduce this measurement alone. The index captures a premium or discount relative to the underlying reference. Positive funding encourages short exposure economically, while negative funding encourages long exposure; neither mechanism guarantees immediate price convergence.

How Is Each Funding Rate Calculated?

Each standard funding rate combines an averaged premium with the interest component, then applies the contract’s upper and lower limits. The premium average gives later observations greater weight within the funding interval. The displayed rate updates every minute as these inputs develop. A rate observed early in the interval can therefore differ from the rate ultimately settled.

Using P for the averaged premium, I for interest, L for the lower limit, and U for the upper limit, the calculation is F = clip(P + clip(I - P, -0.05%, +0.05%), L, U). Here, clip restricts a value to the stated bounds. The inner bounds limit the interest adjustment added to the premium. The outer bounds restrict the final funding rate.

When the difference between interest and premium lies inside the inner band, the uncapped result equals the interest component. Larger differences leave more of the premium in the calculation. The contract limits still apply afterward. A zero interest component consequently permits nonzero funding when the premium moves sufficiently far outside the adjustment band.

Contract Limits and Changing Funding Intervals

Funding intervals and rate limits belong to individual contracts, so one market’s schedule does not establish another market’s schedule. With an eight-hour interval, settlement occurs at 00:00, 08:00, and 16:00 UTC. Contract details provide the applicable interval and upper and lower limits; the next-funding countdown identifies the upcoming settlement.

The ordinary limit calculation uses the initial and maintenance margin rates from the symbol’s lowest risk tier. Its upper bound is the smaller of the maintenance margin rate and 0.75 times the difference between those margin rates. The lower bound is the negative counterpart. Bybit can adjust the coefficient and limits when market conditions require different parameters.

When a perpetual’s funding rate reaches its preset upper or lower limit during settlement, the system switches settlement frequency to hourly. Later limits and frequencies can change dynamically. A holding-cost projection therefore needs the applicable schedule alongside the rate, especially when the market is at a funding boundary.

Funding Amounts in Linear and Inverse Contracts

The payment calculation starts with the contract’s settlement-time position value, expressed in the appropriate settlement currency. The funding fee calculation multiplies settlement-time position value by the settled funding rate. The rate’s sign and position direction determine whether the transfer is a debit or credit.

USDT and USDC Perpetuals

Linear perpetual position value equals contract quantity multiplied by mark price. USDT contracts settle funding in USDT, while USDC contracts settle it in USDC. Quantity means the amount of the underlying asset represented by the position. A percentage rate must become a decimal fraction before multiplication. An unchanged quantity can produce a different payment when mark price changes, even if the settled percentage remains the same.

Inverse Perpetuals

Inverse contracts express quantity in USD, so position value equals that quantity divided by the USD mark price. This calculation produces a value in the underlying settlement coin, which also receives or pays funding. For unchanged quoted quantity, a lower mark price produces a larger coin-denominated value. This differs from the linear multiplication relationship. The distinction matters when reconciling account entries, because a coin amount and a stablecoin amount cannot be added as though they share a unit.

Holding Time and Settlement Boundaries

Settlement participation depends on an open position at the funding time, rather than the number of minutes held beforehand. Closing the entire position before that boundary avoids the corresponding payment or receipt. A partial close leaves the remaining quantity exposed to settlement. Funding processing can take several seconds, however. Opening or closing within five seconds before or after the funding time does not guarantee inclusion or exclusion from that cycle. An unfilled closing order leaves the position open, so order submission alone does not establish the position’s settlement status. Bybit does not reimburse funding charges arising from this timing window.

Leverage, Margin, and Funding Deductions

Leverage affects funding’s burden on committed margin, while the payment calculation continues to use position value and the settled rate.

Unchanged Position Exposure

Changing leverage alone leaves the funding amount unchanged when quantity, mark price, and the settled rate remain constant. For USDT perpetuals, the basic leverage-based initial margin term is contract value divided by leverage. Displayed initial margin also includes an estimated closing fee. Bybit’s documents disagree on whether Isolated Margin uses entry-price or mark-price value, so compare a funding payment with the position’s displayed initial margin. Higher leverage reduces this margin requirement for the same exposure. An unchanged funding debit can consequently represent a larger share of initial margin.

Additional Contract Quantity

Increasing position quantity increases the funding basis when mark price and the rate remain unchanged. Adding collateral without changing the position does not increase that basis. A balance deposit and a larger contract position therefore have different effects: one changes available resources, while the other changes exposure subject to funding.

Deductions From Position Margin

Funding fees draw first from available balance. If it cannot cover the payment, the fee can draw from the position’s initial margin. In Isolated Margin mode, a funding deduction from initial margin moves the liquidation price closer to the mark price. This reduces the position’s buffer. Cross Margin and Portfolio Margin assess liquidation risk through account-level margin requirements.

Funding Payments and Reported Trading Profit

Funding settlements affect trading returns even when the market price does not move between entry and exit. For USDT and inverse perpetuals, unrealized position profit and loss exclude trading and funding fees. Realized and closed results account for applicable charges and receipts. USDC perpetual accounting also includes session settlements in realized results. A profitable price movement can therefore coexist with a smaller final gain after funding and execution costs.

A holding period spanning multiple funding times accumulates the individual settlement amounts. The rates, mark-price values, and remaining quantities can differ across those settlements. Applying the most recently displayed percentage repeatedly would miss those changes. Receipts can also turn into payments when the funding sign changes, so a receiving position does not establish a continuing income stream.

Historical Rates and Personal Settlement Records

Public funding history describes a contract’s settled rates, while personal settlement records describe the account’s actual payments and receipts. The market history pairs each rate with its settlement timestamp. It supports retrospective comparisons across intervals, including periods when funding direction changed. It does not establish what an individual account paid, because the account’s position quantity and participation at each settlement remain separate inputs.

Personal funding entries appear in the Unified Trading Account’s Trade History and Transaction Log. Trade History uses a positive fee rate and fee for a payment, and negative values for a receipt. That account-entry convention differs from interpreting the public funding sign alone. A short can receive funding during a positive-rate cycle and consequently show a negative personal fee entry. Matching the contract, timestamp, currency, and position direction resolves that apparent sign conflict.

Pre-Market Funding and Auction Phases

Pre-market perpetual funding follows phase-specific terms; transition to standard perpetual trading is not guaranteed. During the Call Auction phase, funding is zero, and the interest and premium components do not participate. Contract configuration determines whether trading begins with a call auction or directly with continuous trading. A pair launched directly into continuous trading does not pass through the initial zero-funding phase.

Bybit’s Introduction to Funding Rate specifies a fixed 0.005% rate settled every four hours during Continuous Auction. Introduction to Pre-Market Perpetual, updated September 10, 2026, warns that funding rates can fluctuate during that phase. These descriptions conflict, so use the contract’s displayed rate and interval when estimating payments; its next-funding time identifies the settlement boundary. The earlier Call Auction rule does not make a continuously traded pre-market position funding-free.

Existing positions and active orders remain when a pre-market contract transitions into standard perpetual trading. Risk parameters and index components can change during that transition. Subsequent funding follows the standard contract’s applicable terms. Continuing to hold the same position does not preserve its earlier pre-market rate or settlement schedule after those terms change.

Funding Exposure Across Holding Choices

The same positive settled rate produces opposite cash-flow directions for long and short positions. Funding applies to positions held at settlement and uses each contract’s settlement currency. A negative rate reverses the payment directions. At a zero settled rate, the funding amount is zero even when the position remains open. Fully funded spot holdings have no perpetual funding settlement, although other account activity can create separate liabilities.

Expiry contracts have a scheduled expiration and do not use perpetual funding. Their execution and expiry-settlement costs follow separate contract terms. Spot borrowing interest likewise follows the borrowing liability, rather than the perpetual funding sign. A complete holding-cost calculation combines actual funding settlements with execution charges and any applicable borrowing costs, keeping each currency and payment basis distinct.

Bybit funding rates - your questions answered