I just realized something pretty interesting about how funding fees are calculated on futures — it can become a source of passive income if you know how to play it.

Basically, here’s how it works: when prices fluctuate strongly, the funding rate will be high accordingly. The simple reason is that the long/short ratio becomes unbalanced. If too many people are long, the platform will increase the fee to balance it — at this point, longs pay fees to shorts. Conversely, if there are too many shorts, shorts pay fees to longs.

I usually call it simply:
- Positive funding = longs pay fees to shorts
- Negative funding = shorts pay fees to longs

A real-world example I often encounter: you enter a $100 position with 50x leverage, which means a $5,000 volume. If the funding fee is 2%, then each settlement you lose $100. It doesn’t sound like much, but if you leave the position open, it gets deducted every 8 hours.

Calculating funding fees isn’t complicated, but the key is knowing when to enter. I have a little trick: about 5 seconds before the funding settlement, I enter a position in the advantageous direction:
- If funding is negative (shorts high) → go long
- If funding is positive (longs high) → go short

Close immediately after receiving the fee. Because usually after funding, the price will move in the opposite direction, making it easy to get liquidated if you stay too long.

The cool thing about this trick is that you don’t need to predict whether the price will go up or down, just be sure you will receive funding fees. However, be careful with slippage, and note that the way funding fees are calculated can vary slightly across different exchanges, so you should test on your own platform first.