I just took a quick look at the funding rates, and they’re becoming extreme again. Everyone in the group is debating whether to take the other side of the trade. I used to love “counter-trading,” but honestly, this stuff isn’t free; the extremes can get even more extreme, especially when faced with those needle-like fluctuations. No matter how small the position, emotions can take over.

These past couple of days, we’ve been discussing rate cut expectations and the US dollar index. As a result, risk assets are moving up and down together. When macro narratives heat up, funding rates tend to get squeezed by emotions. My approach is a bit more relaxed: I’d rather avoid the volatility, reduce leverage, and wait for rates to return to normal before gradually adjusting back to long-term positions. If I really had to take the other side, I’d only use the money I can sleep soundly with; the rest I’d pretend I didn’t see.

Next time, I might set a funding rate threshold earlier, so that when it hits, I automatically reduce positions or lower leverage… Do you usually tough it out and endure the funding rate, or do you just sit back and wait for it to cool down?