Funding rates are small payments that move between traders holding long positions and traders holding short positions on a perpetual contract. They keep the perp price aligned with the actual spot price of the asset.
When the perp price is trading above spot, longs pay shorts. When the perp price is trading below spot, shorts pay longs. The direction flips based on market conditions, and that push and pull is what keeps the contract price tracking spot over time.
Funding pays out every hour. If you have an open position when the hour hits, the payment is automatically deducted from or added to your perps cash balance. The amount is proportional to your position size, so a larger position means a larger payment, either paid or received. This is why your perps cash balance can change without you placing any trades.
Hourly amounts are small but they compound. A position you hold for days or weeks can build up meaningful funding costs, or meaningful earnings if you are on the receiving side. When you decide whether to keep a position open, weigh the funding rate alongside your profit and loss, not just the price move.
You can check the current funding rate for any asset on the trade sheet before opening a position.
Perpetuals ("Perps") are provided by third-party protocols and are not available to U.S. Persons (citizens, residents, or anyone located in the U.S.). Do not attempt to access perps from within the United States.
For purposes of these Terms, a "U.S. Person" means: (i) any natural person resident in the United States; (ii) any citizen or permanent resident of the United States, including any such person temporarily located outside the United States; (iii) any entity organized or incorporated under the laws of the United States or any state thereof; (iv) any estate of which any executor or administrator is a U.S. Person; (v) any trust of which any trustee is a U.S. Person; (vi) any agency or branch of a non-U.S. entity located in the United States; (vii) any discretionary or non-discretionary account held by a dealer or fiduciary organized, incorporated, or (if an individual) resident in the United States; or (viii) any entity organized or incorporated outside the United States that is formed by a U.S. Person principally for the purpose of investing in unregistered securities or derivative instruments. "United States" means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia.
Representations and Warranties. By accessing or using Perps functionality, you represent and warrant that: (a) you are not a U.S. Person; (b) you are not accessing Perps from within the United States; (c) you are not accessing Perps on behalf of, or for the benefit of, any U.S. Person; (d) you will not use any technology, mechanism, or technique (including a VPN, proxy, or similar tool) to circumvent or attempt to circumvent geographic restrictions on Perps; and (e) you understand that these representations are material and that Fomo is relying on them in providing you access to Perps functionality.