Calculate daily net carry before the recovery time
Convert the per-interval funding rate to an equivalent daily rate using the number of hours in the settlement interval. Multiply by the relevant position notional to calculate daily funding receipts for the modeled receiving side. Then deduct the daily borrowing cost and any other daily costs included in your inputs.
Daily net carry is therefore modeled funding income minus recurring daily expenses. A positive funding rate is not enough by itself: borrowing or other ongoing charges can exceed the income. Check which asset is borrowed and which amount is actually subject to interest.
Divide one-time costs by a positive daily surplus
When daily net carry is positive, the break-even time in days is total one-time costs divided by daily net carry. Include the planned opening and closing fees for both legs, plus fixed expenses you expect to incur once. Leaving closing costs out makes the recovery period look shorter than the full trade requires.
If daily net carry is zero, an outstanding initial cost is never recovered under the assumptions. If it is negative, the projected loss grows with time. The calculator should report that condition rather than display a negative number of days as a meaningful recovery target.
Stress the assumptions that can change while you wait
Lower the funding rate or raise daily borrow costs to see how quickly the recovery period lengthens. A trade with a small daily surplus is particularly sensitive to a funding reversal, a higher borrowing rate or an early exit. These changes can remove the projected recovery entirely.
The simplified model keeps the notional, funding rate and daily costs constant. It excludes movements in the spot-perpetual basis and the cash required to maintain margin. Use a separate hedge scenario to examine price and basis effects, then reconcile the costs with the actual contracts and balances involved.
Questions about this tool
Why is there no break-even date even though funding is positive?
Your recurring costs may equal or exceed the modeled funding income. Without a positive daily surplus, holding the trade longer cannot recover its one-time entry and exit costs under these assumptions.
Should I include the fee to close both legs?
Yes. If the goal is to recover the cost of the complete trade, include the expected closing fees as well as opening fees and one-time expenses. The future closing prices and applicable fees remain assumptions.