All / Stage 3
How funding erodes a position
Funding is charged three times a day. Two weeks means 42 charges.
On a 20,000 dollar position at 0.01% per period, two weeks costs 84 dollars — 4.2% of a 2,000 dollar margin. Price must move 0.42% your way just to break even.
In hot markets funding runs several times higher. That is when holding a long-term view through derivatives becomes worse than simply buying spot.
Run it on your own numbers
Funding is charged three times a day. Holding a leveraged position for two weeks means 42 charges — usually more than the trading fees.