Social media is once again flooded with screenshots of derivative product earnings, with tags like "monthly salary over 10,000" and "earning 500 daily" everywhere. Some time ago, a trader shared his trading approach: targeting a product with an annual interest rate of over 900%, using a 24-hour funding rate of -0.15%, opening a leveraged position of 200U×10, and earning nearly 70U in funding fees in just one day. At first glance, it seems very tempting—no need to clock in, no internal competition, and the account balance fluctuates every hour. But how many pitfalls are hidden in this logic?

Having been involved in the crypto trading circle for many years, I’ve seen too many people blinded by such high fee rates. Many beginners only look at the positive or negative signs to calculate profits but fail to understand the underlying mechanics of the funding rate. Essentially, this money is the "balancing fee" between the long and short sides in the derivatives market—not a fee charged by the exchange, but a direct transfer of funds between position holders, aimed at preventing the contract price from drifting too far from the spot price. When the rate is negative, the short side needs to pay the long side, which is why the friend above can earn this fee.

It sounds fine, but the problem is hidden in two fatal premises. First, 10x leverage is not a good thing. It means your gains are amplified tenfold, but your losses are also amplified tenfold. With a principal of 200U and 10x leverage, as long as the underlying asset drops more than 10%, your account will be wiped out.