Perpetual Premium vs Funding: How to Read the Data With Price Context
Funding is derived from the premium of the perp over its index, but not one-to-one. A clamp around an interest component means small premiums all produce the same funding.
Short answer
On Binance, funding = premium index + clamp(interest rate − premium index, −0.05%, +0.05%), with an interest component of 0.01% per 8 hours on most contracts. When the premium is within ±0.05% of 0.01%, funding settles at exactly 0.01% — so many ordinary premiums produce identical funding. Larger premiums pass through: a 0.10% premium gives 0.05% funding. Read the premium index for intrabar positioning pressure and funding for the cost actually paid; check each venue's formula.
The formula at work
| Premium index | I − P | Clamped | Funding |
|---|---|---|---|
| 0.03% | −0.02% | −0.02% | 0.01% |
| 0.00% | +0.01% | +0.01% | 0.01% |
| 0.10% | −0.09% | −0.05% | 0.05% |
| −0.08% | +0.09% | +0.05% | −0.03% |
Price context
Because funding is flat across ordinary premiums, a premium index that is rising but still inside the band can show pressure building before funding changes.
Using it
Related: Annualized Futures Carry in Crypto: How to Read the Data With Price Context, Binance Funding History: Null vs Zero - Handle Missing Fields Correctly.
Check premium vs funding beside price in ChartsPod.
Open BTC/USDT in ChartsPodRead the premium index for intrabar positioning pressure and funding for the cost actually paid; check each venue's formula.
Compare Perpetual Premium vs Funding across Binance, Bybit, OKX and Hyperliquid markets.
Open markets in ChartsPodQuestions readers ask
Is funding equal to the premium?
Not on Binance; a clamp around the interest rate applies.
Why is funding often exactly 0.01%?
Small premiums fall inside the clamp.
Which is more responsive?
The premium index.
Sources and methodology
Definitions follow Binance's USD-M market data documentation, Hyperliquid's funding documentation, TradingView's open-interest guide and Bybit's liquidation rules, read 17 October 2026. Examples are illustrative, not recorded market data.
- Binance: Introduction to futures funding rates — premium index, interest rate and clamp.
- Binance: USD-M Futures market data API — trades, depth, funding and open interest.
- ChartsPod: product overview, pricing and FAQ — free terminal, venues, modules, no order placement; checked 17 Oct 2026.
This article explains research tools and workflows. It is not financial advice, does not recommend buying or selling any asset and does not predict prices. Crypto derivatives carry a risk of rapid and total loss of margin.
CHARTSPOD EDITORIAL EDITION · RESEARCH AND EDUCATION ONLY · NOT FINANCIAL ADVICE.