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In the app, this is called the leverage fee. Other trading platforms call the same thing the funding rate. They are one and the same. We use “leverage fee” because it says what it is: the ongoing cost of holding a leveraged position.
When you use leverage, you are controlling a big position with a small amount of your own money, and someone on the other side of the trade is taking the opposite view. Every hour, whichever side is more crowded pays a small amount to the other side. That is the leverage fee. Most hours it is a few cents on a $1,000 position, and some hours it pays you. It exists because a perpetual contract has no expiry, so nothing else forces its price back to the real asset’s price. When the contract trades above the real price, longs pay shorts, which nudges the price down. When it trades below, shorts pay longs. The payment is peer to peer; Alpha does not take any of it.

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Who pays whom

If you are on the paying side, the amount is deducted from that position’s margin each hour, which moves your liquidation price slightly closer. If you are on the receiving side, it is added, which moves it slightly further away.

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How much is it?

The rate is set by the market and changes every hour. It has two parts:
  1. A premium based on how far the contract is trading from the real price, sampled continuously and averaged over the hour.
  2. A small fixed interest component of 0.01% per 8 hours (0.00125% per hour), reflecting the cost of holding dollars vs. holding the asset.
The hourly rate is capped at 4%, but in normal conditions it is a tiny fraction of that. The current rate for every market is shown on the market screen in the app, and your accrued leverage fee is shown on each open position.

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How the payment is calculated

Example. You hold a $10,000 long. The hourly rate is 0.001% (positive). You pay $10,000 × 0.00001 = $0.10 that hour. Hold for a day at that rate and it is $2.40. Note that the calculation uses the real market price, not the contract price, and applies to your full position size, not your margin.

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Why it matters for you

  • Holding costs. Funding is the only ongoing cost of an open position. On a short-term trade it is usually negligible. On a position held for weeks, it adds up, especially at high leverage where position size is large relative to margin.
  • It can pay you. If you are on the receiving side, funding is income while you hold.
  • It affects your liquidation price. Funding you pay comes out of margin, which moves your liquidation price slightly closer over time. Funding you receive does the opposite.
  • It is a sentiment signal. A high positive rate means the market is crowded long. Some traders use it as a contrarian indicator.

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Where to see it

  • Market screen: current leverage fee and the countdown to the next payment.
  • Position screen: leverage fee paid or received since you opened the position.
  • Activity: every individual leverage fee payment.