Funding Rate Capture

Definition ∞ Funding rate capture is an investment approach in cryptocurrency perpetual futures markets where participants aim to gain from regular payments exchanged between long and short holdings. The funding rate ensures the perpetual contract’s price remains near the spot asset’s value. Traders position themselves to collect these payments when the funding rate is positive or negative. This technique seeks steady, often low-risk, profits.
Context ∞ Funding rate capture is a frequently discussed subject in crypto trading communities and market assessments. It offers a considerable profit opportunity, particularly during times of intense market speculation when funding rates rise. However, the method carries dangers related to sudden price changes of the core asset and unforeseen alterations in funding rates. News often covers adjustments in funding rates as a sign of market sentiment and potential arbitrage chances or dangers.