Perpetual Futures Funding Fee FAQ
The funding fee is a trading fee mechanism for perpetual futures contracts. It is designed to maintain balance between the contract price and the underlying asset price. It is not a fee generated from borrowing funds.
The purpose of the funding fee is to balance long and short positions in the perpetual futures market and anchor the contract price to the spot index price.
The platform does not charge funding fees. Funding fees are exchanged directly between users holding positions:
When the funding rate is positive, long position holders pay funding fees to short position holders.
When the funding rate is negative, short position holders pay funding fees to long position holders.
When the funding rate is 0.00%, no funding fee is settled between either party.
What is perpetual futures funding fee?
The perpetual futures funding fee is a trading fee mechanism designed to ensure that the contract’s mark price remains aligned with the spot index price of the underlying asset.
Perpetual futures are a special type of contract that allows users to hold positions without expiration. The funding fee mechanism helps prevent the contract market price from deviating significantly from the spot index price, thereby maintaining market stability.
Why do perpetual futures require funding fees?
The funding fee mechanism arises from supply and demand imbalances in the market.
When the majority of users hold positions in the same direction (long or short), abnormal market volatility may occur, and the contract price may deviate from the spot index price.
When such deviations occur, the funding fee mechanism incentivizes position rebalancing between long and short holders, encouraging price realignment between the contract and the underlying asset.
This mechanism:
Helps prevent excessive market price fluctuations
Reduces the likelihood of market manipulation
May result in funding fee income or expense for contract holders
How do I check the funding rate for perpetual futures?
On the app
Go to perpetual futures trading page
Find Chart > Info > Funding rate
Note: during periods of extreme market volatility or when long and short positions are imbalanced, the funding rate may be relatively high. Please monitor the funding rate accordingly.
On the web
Go to futures transaction page
Find the Funding rate (8h)/Countdown to view the current rate, you can also go to learn more to understand about Funding fee mechanism
FAQ
1. How is the funding fee for perpetual futures calculated?
The funding fee is calculated using the following formula:
Funding fee = Position value * Current funding rate,
When the funding rate is positive, long position holders pay short position holders.
When the funding rate is negative, short position holders pay long position holders.
For details on funding rate calculation methods and collection sequence, please refer to the Help Center article: Introduction to Perpetual Funding Fee Rules.
2. How is the funding fee charged for perpetual futures?
Funding fees are calculated once every 8 hours. For certain contracts, funding fees may be calculated every 1, 2, or 4 hours. The specific schedule is displayed on the contract trading page.
Standard settlement times are:
08:00 (HKT)
16:00 (HKT)
24:00 (HKT)
Actual settlement is completed within 1 minute. For each individual contract, settlement occurs at the millisecond level. Trading is not suspended during settlement.
Users are only required to pay or receive funding fees if they hold a position at the settlement timestamp. If a position is closed before settlement, no funding fee will be applied. The settlement process is automatic.
Funding fees are exchanged directly between position holders within the contract.
3. How do I check funding fee income or expense?
While holding a perpetual futures position, you can view your funding fee income or expense through: Assets > History > Trading > Trading history > Instrument: Perpetual > Type: Funding rate to check the history of your funding fee records.
4. How can I view historical funding rates?
On the app
Go to perpetual futures trading page
Find Chart > Info > Funding rate
You can view and compare funding rate history for up to the past 3 months.
For the funding rate calculation formula, please refer to: Introduction to Perpetual Funding Fee Rules。