Annualised Leverage Cost Calculator

How to use this tool

Holding leveraged perpetuals comes with a hidden carrying cost that almost every newcomer underestimates: funding rate. Unlike trading fees, it isn't charged at order entry — it's quietly deducted every 8 hours. With 10x leverage and persistently positive funding, the weekly figure can dwarf the fee total.

Numbers for context: BTC funding at 0.01% per 8h. You post 1,000 USDT and open 10x long, so notional is 10,000 USDT. The per-settlement cost is 10,000 × 0.0001 = 1 USDT. Over a week (21 settlements) that's 21 USDT, or 2.1% of your margin — annualised to 109%. That's the real "amplified" number, because funding is computed on notional but deducted from margin.

Compare against the alternative: the same 1,000 USDT in USDC earning 4.5% APR yields 45 USDT a year. One week of carrying a leveraged long can wipe out an entire year of stablecoin income. That's why "long-term hold a leveraged perp" is mathematically hostile — you need direction and magnitude to clear the carry.

The math behind it

Notional N = Margin × Leverage
Per-settlement cost = N × funding rate (8h)
Funding nominal APR = funding × 3 × 365 (8h cadence)
Amplified APR (vs margin) = funding × 3 × 365 × leverage

Cumulative cost over N hours = per-settlement × floor(N / 8)
As % of margin = cumulative / margin

Opportunity cost = amplified APR − stablecoin APR

This assumes funding stays constant across the holding period. Realised funding oscillates and the average over multiple days is usually smaller. But during euphoric bull tops funding can sit above 0.02% for two weeks straight — at that point cumulative carrying cost on a leveraged long blows past expectations.

Common mistakes

"0.01% funding sounds tiny." Each event is tiny; the cadence isn't. 0.01% × 1,095 events per year = ~11% nominal APR on notional. At 10x leverage that's ~110% APR on margin. That's the real interest rate on leveraged positioning.

"I'm only in the trade for 2 hours, funding doesn't apply." Correct in principle, but OKX (and most venues) charge the full settlement if you happen to be open at the cut-off — 00:00, 08:00, or 16:00 UTC for BTC-USDT-SWAP. Five minutes of holding through a settlement still costs one full settlement. Either enter after the cut-off or build the carry into your target profit.

"Shorting means I earn funding." Funding mirrors market sentiment; bull markets skew positive, bears skew negative. Earning funding via short positions usually coincides with the direction working against you — that's a natural market-efficiency outcome. The rare regime where trend and funding both favour your side does exist; don't expect it as the norm.