Trading concepts
Understanding funding
Funding may apply to leveraged positions and can affect the total cost of holding a trade over time.
2 min read
How funding affects a position
Funding is a recurring cost or credit that may apply while a leveraged position remains open. It can change the total result of a trade, especially when the position is held for longer than expected.
Before opening a position, traders should check whether funding applies, when it updates and how it may affect the cost of holding the trade.
- Funding can be positive or negative depending on the market.
- A profitable price move can still be affected by holding costs.
- Longer holding periods make funding more important.