What is Funding Volatility?

Funding volatility measures how much the funding rate moves from one settlement to the next. A market where funding flips between +50% and −20% APR within hours is volatile; one that sits steadily near +10% is stable.

It matters for arbitrage because the headline APR is annualised from the current rate — if that rate is volatile, the spread you see may not persist long enough to actually earn. A moderate but stable spread often beats a high but jumpy one after [execution cost](/glossary/slippage).

ORBIT surfaces a stability indicator on historical timeframes so you can tell a durable spread from a one-off spike before you size the trade.