How are Funding Rates calculated?
Funding Fee Calculation Examples
- COIN-M Inverse Contract
In the given example, in approximately 4 hours, long position holders will need to pay a 0.01% funding rate to short position holders.
Funding Fee is calculated as follows:
Funding Fee = Position Value x Funding Rate
Inverse Position Value = Quantity of Contract/Mark Price
For instance, let's consider Trader A holding a long position of 10,000 BTCUSD contracts, with the Mark Price at 65,000 USD and the current funding rate at 0.01%.
First, calculate the Position Value:
Position Value = 10,000 / 65,000 = 0.153846 BTC
Now, compute the Funding Fee:
Funding Fee = 0.153846 BTC * 0.01% = 0.00001538 BTC
As the funding rate is positive (0.01%), indicating long position holders must pay short position holders, Trader A will pay a funding fee of 0.00001538 BTC. Conversely, a short position holder with the same quantity of contracts will receive the same amount.
- USDT-M Linear Contract
Taking the example from the provided screenshot, long position holders are required to pay a 0.0233% funding rate to short position holders.
The Funding Fee is determined as follows:
Funding Fee = Position Value x Funding Rate
Linear Position Value = Quantity of Contract x Mark Price
For example:
Trader A holds a long position of 2 BTC contracts, with the Mark Price set at 65,000 USDT during the funding timestamp and a current funding rate of 0.0233%.
First, let's calculate the Position Value:
Position Value=2×65,000=130,000 USDT
Using the Position Value, we can now calculate the Funding Fee:
Funding Fee=130,000×0.0233%=30.29 USDT
Since the funding rate is positive (0.0233%), indicating that long position holders must pay short position holders, Trader A will need to pay a funding fee of 30.29 USDT. Conversely, a short position holder with the same quantity of contracts will receive 30.29 USDT.
How to View Your Funding Fee Records?
- WEB：
Within the Contract History, you'll find details regarding the funding fee rate and the corresponding funding fee paid. It's important to understand that a positive fee indicates that you have paid the funding fee, whereas a negative fee signifies that you are receiving the funding fee.
- APP:
Kindly refer to the screenshots below to review your funding fee history within the app.
You can review the funding rate history for all trading pairs on Phemex here
In the event of extreme market volatility, Phemex reserves the right to update the funding rate floor and cap, as well as the funding interval of a perpetual contract that differs from the default 8-hour funding interval.
Going forward, updates to the funding rate caps and floors, as well as the settlement frequency, may be made at any time in response to market conditions and without prior notice.
You can visit the current funding rate and funding rate history pages to find out the latest funding interval and funding rate cap or floor.