Shorting Perpetuals: Making Money Off Funding Rates

When markets turn bullish on perpetual futures, something interesting happens. Traders holding SHORT positions don't just sit there hoping for a reversal—they collect funding payments every single interval. Each exchange has its own funding cycle, so timing matters.

But here's the thing: it's not always smooth sailing in these funding environments. Sometimes the rates flip, conditions shift, and what looked like easy money becomes complicated. That's where understanding the mechanics really pays off.

The strategy works like this—you lock in SHORT positions when funding rates stay positive. Every time the interval closes, payments hit your account. Different platforms run different rhythms, so savvy traders watch multiple venues simultaneously. Bybit cycles faster than some competitors. Deribit has its own pattern.

The catch? Funding rates aren't always in your favor. They fluctuate based on market sentiment and leverage usage. When too many traders pile into LONG positions, funding flips negative—suddenly SHORT holders lose money instead of gaining it.

Smart money tracks these cycles obsessively. They scale into SHORTS when funding sits consistently positive, pyramid positions across multiple exchanges, and exit before any reversal signals appear. It's not gambling; it's reading the market's pulse and exploiting structural mechanics.

The best times hit when retail euphoria pushes markets overbought but funding hasn't reversed yet. That window closes fast.