What is a funding rate, and how do you see it beside the chart?
A funding rate is a small payment that long and short traders on a perpetual future send each other, to keep its price close to the spot price. When the rate is positive, longs pay shorts. Open interest is how much of the contract is still open. TradingTwo charts both under the price.
Funding rate in plain words
A perpetual future is a contract on a coin that never expires. With no expiry date, nothing forces its price back toward the price of the coin itself. Exchanges add a payment between the two sides of the trade instead. That payment is the funding rate.
If the perpetual trades above its reference price (Hyperliquid uses an oracle price), the rate turns positive and longs pay shorts, which makes holding a long position cost something. If it trades below, shorts pay longs. On Hyperliquid, funding is paid every hour, and each hourly payment is one eighth of the computed eight-hour rate. The rate is capped at 4% an hour.
Open interest in plain words
Open interest is the total size of the contracts that traders have opened and not yet closed. It goes up when new positions are opened and down when positions are closed or liquidated. It is shown in US dollars in TradingTwo.
It is not volume. Volume counts every trade, including a position opened and closed in a minute. Open interest counts only what is still open at the moment you look.
How traders read the two
- High positive funding. Longs are paying a lot to stay in. Many traders treat that as a sign the long side is crowded. A crowded side can stay crowded for a long time, so it is a prompt to look, not a signal to trade.
- Negative funding. Shorts are paying. The same caution applies in reverse.
- Open interest rising with price. New positions are entering as price moves. Open interest alone does not say whether the new positions are long or short.
- Open interest falling. Positions are closing, by choice or by liquidation.
None of this predicts price. It shows how the market is positioned, which is context for a chart you already read.
How TradingTwo shows them
Funding rate and open interest sit in panes under the price chart and follow the Market you are looking at. They come from Hyperliquid. On a spot chart for Bitcoin, Ethereum, Solana, XRP, Dogecoin, BNB, Cardano, Chainlink, Avalanche, Sui or Hyperliquid's own coin, the panes use the matching Hyperliquid perpetual. For other spot coins, DEX pools and the market-wide Indices there is no derivatives pane.
You can also set an alert on funding rate or open interest, alone or with a price condition. Funding is in percent per hour. TradingTwo shows these two series only. It does not show liquidations or the long/short ratio.
Funding mechanics are from Hyperliquid's documentation, read 24 October 2026. Other exchanges set their own funding interval and caps.
Questions
Who pays the funding rate?
When the rate is positive, traders holding long positions pay traders holding short positions. When it is negative, shorts pay longs.
How often is funding paid on Hyperliquid?
Every hour. Each payment is one eighth of the computed eight-hour rate.
Is open interest the same as volume?
No. Volume counts every trade in a period. Open interest counts the contracts still open now.
Does a high funding rate mean the price will fall?
Not by itself. It shows that longs are paying a premium to hold, and a crowded trade can stay crowded. Use it as context.