What does "1h Funding" and "1h Rollover" mean?
Last updated
Last updated
Definition: "1 hr funding" refers to the interest payment (or receipt) that traders incur or receive for holding their positions over a one-hour period.
How It Works: Funding rates are typically determined based on the Long/Short Ratio and overall market conditions. If you're holding a long position and the funding rate is positive, you'll pay that rate. Conversely, if you're in a short position, you might receive that payment if the rate is negative.
Purpose: The funding mechanism helps ensure that the price of the perpetual contract remains close to the price of the underlying asset. It incentivizes traders to balance their positions, which helps stabilise the market.
Definition: "1 hr rollover" often refers to the process of adjusting or rolling over open positions to the next funding period, which occurs every hour in this context.
Implications: During the rollover, any funding payments are applied to your account, and positions are adjusted to reflect the new funding rate. If you're holding a position through the rollover, you'll either pay or receive the funding fee based on your position type (long or short).
Significance: Understanding the rollover process is crucial for traders, as it can impact the profitability of a position, especially if the funding rate changes significantly.
