Convert the rate using its own interval
For a linear quote-settled position, the modeled payment per settlement equals position notional multiplied by the funding rate expressed as a decimal. The interval determines the number of equivalent settlements in a day: divide 24 by the interval in hours. Daily funding is the per-settlement amount multiplied by that number.
The simple annualized rate multiplies the interval rate by equivalent daily settlements and by 365. It does not compound or assume the payment can be reinvested. A small rate attached to a short interval can represent a larger daily cost than a higher rate attached to a long interval.
Keep position notional separate from collateral
Funding is modeled on the exposure of the position, not simply on the collateral you deposited. Reducing collateral while maintaining the same notional does not reduce the projected funding amount. It changes the relationship between that payment and the capital supporting the position.
The period return on committed capital is projected funding minus entered strategy costs, divided by your capital input. Include the amount needed for every leg and the margin buffer in that input. A return measured only against minimum initial margin can obscure the funding required to keep a hedge operating.
A time projection is not a settlement record
Actual payments depend on the position held at the venue's settlement events. A proportional time projection may include a fractional equivalent interval; an exchange's actual cash flows occur under its own settlement rules. Use the real event schedule when planning an opening or closing time.
Rates, mark-price notional and settlement intervals can change. Trading fees, borrow interest, basis movement and liquidation effects are outside this single-rate projection. Reconcile completed trades with the exchange's funding history rather than assuming the original dashboard estimate remained valid throughout the holding period.
Questions about this tool
Is the annualized funding rate an APY?
No. It is a simple extrapolation of the input rate and interval across 365 days. It does not compound and does not imply that the current rate will persist for a year.
Does positive funding always mean I earn money?
It depends on your side. Under the standard convention modeled here, positive funding is received by shorts and paid by longs. Total trade profit also depends on price movement and other costs.