What is funding fee?
Funding fee refers to the fee that the position holder needs to pay regularly to long or short traders when there is a price difference between the market price of the perpetual contract and the spot market price.
The CoinEx perpetual contract uses a funding fee mechanism to anchor the market price of the perpetual contract to the spot price.
The funding fee mechanism can prevent the continuous price deviation between the perpetual contract market and the spot market.
The funding rate is calculated every minute.
The funding fee is paid or charged every eight hours, and only needs to be paid or charged when the position is held at the time when the funding fee is settled.
When the funding rate is positive, the longs pay the shorts, and when the funding rate is negative, the shorts pay the longs.
Funding fee is essentially a fee for transferring between long/short parties, and CoinEx will not charge any handling fees from it.
Funding fee = number of positions * mark price * funding rate
The funding fee settlement time is 08:00, 16:00, 24:00 every day (UTC+8).
Funding fee collection method
(1) In cross-margin mode
When the fund fee is collected, it will be deducted directly from the user’s realized profit and loss, at most until the user’s margin rate is equal to the maintenance margin rate + liquidation fee rate, and the excess will not be charged.
(2) In isolated margin mode
When the fund fee is collected, it will be deducted from the user’s realized profit and loss first.
If the realized profit and loss is insufficient, the excess part will be deducted from the fixed margin of the user’s position. The excess will not be charged.
When the system charges funding fees, it will be charged based on the funding rate calculated one minute before the previous settlement time.
For example: when the system settles at 16:00 (UTC+8), the funding rate calculated at 07:59 (UTC+8) is used for funding fee collection.
The actual fund fee that can be collected each time depends on the total amount that the system can deduct from the payer’s account.