đ What's Really Happening with Your $RIVER Short
You've correctly identified the mechanics. In perpetual futures markets, a negative funding rate means shorts pay longs. This is designed to tether the perpetual contract price to the spot price.
Your situation with $RIVER is a textbook case.
The token is known for extreme volatility and high leverage (up to 20x), which creates a perfect storm for these dynamics. When the market sentiment is heavily tilted towards shorting (as it seems to be with RIVER), shorts collectively pay a premium to longs to maintain their positions.
This creates a hidden cost that can completely erode paper gains from favorable price movement.
đ§ The Key Takeaway for All Traders
Your post reveals the essential checklist that must come before celebrating a green position in perps:
Check Funding Rate History:Â Is it consistently positive or negative? What's the cumulative cost over your planned holding period?
Factor it into Your Thesis:Â
A short position with strong negative funding isn't just betting against the price; it's betting that the price will fall fast enough and far enough to overcome the constant fee bleed. You must calculate your needed price target including these costs.
Manage Accordingly:Â This might mean adjusting your position size, setting a tighter stop-loss, or accepting that a "winning trade" in a heavily skewed funding environment requires significantly more favorable movement.
Your painful discoveryâthat profit on the chart doesn't equal profit in your walletâis a rite of passage for futures traders. By sharing it, you've given others a crucial warning to always check the funding before celebrating the green.
This is the kind of real, practical insight that separates seasoned traders from those just looking at candles. Well spotted, even if it was costly.
