# Funding Rate

### What is the funding rate? <a href="#what-is-the-funding-rate" id="what-is-the-funding-rate"></a>

In perpetual futures contracts, the funding rate is a periodic payment exchanged between traders holding long and short positions. This mechanism helps ensure that the contract price stays close to the underlying spot market price.

* Positive funding rate: When the contract price is above the mark price, long traders pay short traders.
* Negative funding rate: When the contract price is below the mark price, short traders pay long traders.

### Funding Amount

The funding amount is how much you will actually pay or receive based on the funding rate.

Funding amount = Position size × Mark price × Funding rate

This value is transferred between long and short traders depending on the direction of the funding rate. **FlowX does not charge or receive funding** — it is a peer-to-peer transfer.

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