Crypto & Futures
The funding rate is a periodic payment, usually every eight hours, exchanged between long and short holders of a perpetual futures contract; when the rate is positive longs pay shorts, when it is negative shorts pay longs, and its purpose is to pull the perpetual's price back towards the spot price.
Funding is a real cost or income that does not appear in the entry and exit prices. A position held through several funding times at a high positive rate can lose more to funding than it gains from the price move, and a strategy that always trades in the crowded direction pays funding structurally. The rate is set by the market, changes every interval, and differs between exchanges for the same symbol, so it is also a signal about crowding: extremely positive funding means the market is heavily long.
AlgoVesta executes on the exchange account you connect, so funding is charged or credited by the exchange directly to that account, exactly as it would be for a manual position, and it can be seen in the exchange's funding history. The trade log shows gross results from entry and exit fills; funding and fees are not folded into the per-trade figure, which is stated openly so you do not mistake a gross number for a net one. Because funding is charged on the full notional, the leverage cap and the fixed margin per signal keep the exposure, and therefore the funding cost, predictable. The optional auto-close rule can close positions after a set number of hours, which is one way to avoid holding through many funding intervals. Mark prices used for the dashboard come from the exchange's public feed. See perpetual futures and crypto automation.
A $500 notional long on BTCUSDT is held for 3 days while funding averages 0.03% per 8-hour interval. Nine intervals at 0.03% of $500 is about $1.35 paid to shorts. On a $100 margin that is 1.35% of the margin, a meaningful drag on a trade targeting 5%. At 0.1% per interval, the same position would pay $4.50.