Funding rate
Also known as: funding payment, perp funding
Periodic payments exchanged between long and short holders of a perpetual contract to keep its price near spot; relevant to trading income.
Definition
The funding rate is a periodic payment between holders of long and short perpetual positions, designed to tether the perp price to the underlying spot price. When the rate is positive, longs pay shorts, and vice versa. For tax, funding paid or received is part of your overall derivatives trading result — generally revenue — and should be captured in rands alongside realised position gains and losses.
Example
Over a week your long perp pays R200 in funding while gaining R1,000; the net R800 is part of your generally-revenue trading result.
Jurisdiction notes
- South Africa: Funding paid or received on perpetuals is part of the generally-revenue trading result and recorded in rands.