How do I calculate futures funding fee?

1. Why do perpetual futures have funding fees?

Funding fees can make the perpetual swap price to revert to the index price, making it an important mechanism.

When the funding rate is positive, long position holders pay funding fees to short position holders; conversely, when the funding rate is negative, short position holders pay funding fees to long position holders. Funding fees are exchanged between long and short positions, and the platform does not charge any service fees.

2. When is the funding fee charged?

Normally, OKX settles funding fees every 8 hours at 8:00, 16:00, and 24:00 (UTC+8) each day. For certain futures, OKX settles funding fees every 1, 2, or 4 hours.

3. How is the futures funding fee calculated?

Funding fee = Position value × Funding rate

For the funding rate formula, please refer to: Introduction to Perpetual Funding Rate Rules

USDT-margined futures

Position value = Number of contracts × contract size × Contract multiplier × Mark price

Example: If you hold 10 BTCUSDT perpetual futures long positions, with the current mark price at 80,000 USDT, contract size at 0.01 BTC, and a funding rate of 0.05%.

Position value = Number of contracts × contract size × Contract multiplier × Mark price = 10 × 0.01 × 1 × 80,000 = 8,000 USDT

Funding fee = 8,000 × 0.05% = 4 USDT

If the funding fee is positive, then longs pay shorts. Therefore, in this case, the long position will pay the short position a funding fee of 4 USDT.

Crypto-margined futures

Position value = Number of contracts × contract size × Contract multiplier / Mark price

Example: If you hold 100 ETHUSD perpetual futures short positions, with a contract size of 10 USD, the current mark price is 2,000 USD, and the funding rate is 0.1%.

position value = Number of contracts × contract size × Contract multiplier / Mark price = 100 × 10 × 1 / 2,000 = 0.5 ETH

Funding fee = 0.5 × 0.1% = 0.0005 ETH

When the funding fee is positive, longs pay shorts, so in this case, the short position will receive a funding fee of 0.0005 ETH.