Know what the funding percentage multiplies
For a linear perpetual contract, funding is calculated from position value and the applicable funding rate. Bybit's documentation distinguishes this from inverse contracts, whose settlement calculation uses different units. A USDT notional example must not be copied directly into a coin-settled contract without adjusting the formula.
In a simplified constant-notional scenario, a 0.01% rate every eight hours means 0.03% per day. Multiplying that daily rate by 365 gives 10.95% simple annualized funding on notional. This is a rate conversion under a constant-rate assumption. It is neither a forecast nor evidence that the rate will persist for a year.
Work through a 30-day hedge
Suppose an illustrative strategy owns 10,000 USDT of spot BTC and holds an equal initial BTC quantity short in a linear perpetual. Assume the funding rate stays at positive 0.01% every eight hours, its funding notional remains 10,000 USDT, and the position qualifies for 90 settlements over 30 days. The short receives 90 USDT in this simplified funding calculation.
Now assign 24 USDT to opening and closing both legs and 6 USDT to estimated slippage. Funding less these costs is 60 USDT. If committed capital is 10,000 USDT for spot, 3,000 USDT margin and a dedicated 2,000 USDT reserve, the 30-day funding-minus-cost return is 60 divided by 15,000: 0.40%. Without price changes or other cash flows, simple annualization of that period result would be approximately 4.87%.
Do not hide capital in a different account
The relevant capital base depends on the question. Return on exchange margin can help monitor a derivatives account. Return on total strategy capital includes the spot purchase and any reserve deliberately allocated to keep the hedge operating. Label each denominator explicitly; presenting the first number as the second exaggerates capital efficiency.
A reserve outside the derivatives venue can still be committed capital even while idle. It also may not be available instantly when needed. Conversely, including an unrelated investment portfolio in the denominator would obscure the strategy's actual allocation. Write down which balances the strategy relies on before calculating its return.
Separate funding income from complete hedge performance
Equal BTC quantities can offset much of the direct price exposure of a linear spot-perpetual hedge, but spot and perpetual prices can move differently. A widening basis, fees, collateral changes and an early forced close can affect the result. A profitable combined position also does not mean each separate margin account has sufficient usable collateral.
Recalculate the scenario with the funding rate halved, zero and negative. Change the holding period while keeping opening and closing costs intact. Finally, estimate the effect of adverse basis movement with a hedge calculator. A complete decision compares these outcomes with committed capital; a headline APR alone cannot provide that comparison.
Questions about this tool
Is funding APR the same as APY?
No. Simple APR scales a periodic rate without compounding. An APY calculation additionally assumes a reinvestment process. Reinvesting funding into a hedged position requires changes to positions and collateral, so compounding is not automatic.
Does using more leverage increase funding earned on the same notional?
No. It changes the margin requirement and available margin buffer. The funding calculation still follows the contract's position value, rate and settlement rules.