Before opening a funding rate arbitrage position, you need to know: how much will I actually earn, and how long until I break even on trading fees? This calculator guide walks you through the math step by step, with ready-to-use formulas and real-world examples at different capital levels.
'Conservative' (0.01%) is typical during bear markets or ranging periods. 'Average' (0.03%) is the long-term average across all market conditions. 'Bullish' (0.08%) happens during bull market rallies. 'Extreme' (0.20%+) occurs during meme coin manias or major breakouts — not sustainable long-term.
Opening and closing a funding rate position involves 4 trades total. Here's the exact fee calculation:
How long do you need to hold a position before your funding income exceeds the entry + exit fees?
Rule of thumb: Don't open a position if the break-even time exceeds 7 days. If the rate is only 0.005%, your money is better deployed in spot arbitrage or staking.
If you reinvest your funding income (increase position size with earnings), the growth compounds. Here's a simulation starting with $10,000 at the average 0.03% rate:
See which coins have the best rates right now. Calculate your potential income before opening a position.
View Rates →Most discrepancies come from whether the calculator uses simple interest or compound interest, and whether it accounts for negative funding periods. Our table uses simple interest for monthly and compound interest for annual. In reality, expect about 70% of the 'simple' calculation due to occasional negative periods.
Yes, for accurate net income planning. In most jurisdictions, funding rate income is taxed as short-term capital gains or ordinary income. The table shows pre-tax returns. Consult a tax professional for your specific situation.
Generally, don't open a position below 0.01% per 8h. At 0.01%, break-even on a $10K position takes 10 days. If you expect rates to stay low for extended periods, your capital is better used elsewhere.
On Binance: (1) Check your futures P&L daily, (2) If you've earned $50+, increase both your spot position and futures position by that amount, (3) Keep the hedge balanced. Some exchanges automate this with their 'copy trading' or 'portfolio rebalancing' features.
Yes, on most exchanges (Binance, Bybit, OKX). However, some exchanges use different schedules: dYdX pays hourly. The rate you see at the start of the period is what you'll receive/pay at the end. You must hold the position at the exact payment time — closing 1 minute early means you miss that period's payment.
In theory, higher leverage = larger position = more funding income. But this is dangerous. At 10x leverage, a 10% price spike can liquidate your futures even though you're hedged — because the spot gain doesn't automatically flow to your futures margin. Stick to 2-3x for safety.
