Funding fee mechanism
At OKX, our perpetual futures adopt a funding fee mechanism designed to align the market price of the perpetual market with the index price.
Funding fee assessment
When the funding rate is positive, traders with long positions pay a funding fee to traders with short positions; conversely, when the funding rate is negative, traders with short positions pay a funding fee to traders with long positions. Please note, that our platform only facilitates the exchange of funds between traders, and does not charge any service fees under this mechanism.
The funding fee is settled every 8 hours, unless specified otherwise, fee assessments are scheduled at 12:00 am, 8:00 am, and 4:00 pm UTC. For each perpetual future, fee assessment is completed at a millisecond level and trading is not interrupted. Traders are obligated to pay or receive the funding fee if they hold open positions at the point of fee assessment. If you close your position before the funding fee assessment, you are exempt from paying or collecting the fee. Additionally, if a perpetual future is delisted prior to assessment, the current cycle’s funding fee becomes void. The actual fee assessment might span a minute. For example, when a trader opens a position at 00:00:20 UTC, the funding fee could still apply to the trader (either collecting or distributing the funding fee) if the fee assessment has yet to end. The funding fee settlement timing may be adjusted in real time according to market conditions.
Funding rate calculation
Funding rate = Clamp[MA( Premium index – Interest rate), Funding rate cap, Funding rate floor]
Interest rate is zero.
For more information on the cap and floor, please refer to /trade-market/funding/swap
Premium index = [(Best bid + Best ask) / 2 – Index price] / Index price
MA, also known as the moving average, refers to the average value of the premium index over the past 8 hours
For example: MA(Premium index at Tn) = (Premium index at T1 + Premium index at T2 + ... + Premium index at Tn) / n. The funding rate at 7:59 am will be calculated using the premium index of every minute within the 12:00 am to 7:59 am time period. In other words, n = 480.
The funding rate used to calculate the funding fee during fee assessment will be the most recent funding rate.
For example, the fee assessment at 4:00 pm will use the funding rate calculated at 3:59 pm.
Funding fee calculation
Funding fee = Position value × Funding rate
USDT-margined/USDC-margined perpetual futures
Position value = Number of contracts × Contract size × Contract multiplier × Mark price
Example:
User has a long position of 10 BTCUSDT Perpetual contracts with its current mark price being 60,000 USDT, 0.01 BTC face value per contract, and the funding rate equals to 0.1%.
Position value = 60,000 × 10 × 0.01 × 1 = 6,000 USDT
Funding fee (platform collects) = 6,000 × 0.1% = 6 USDT
Crypto-margined perpetual futures
Position value = Number of contracts × Contract size × Contract multiplier / Mark price
Example:
User has a short position of 100 ETHUSD Perpetual contracts with the current mark price being 4,000 USD, 10 USD face value per contract and the funding rate equals to 0.1%.
Position value = 100 × 10 × 1 / 4,000 = 0.25 ETH
Funding fee (platform distributes) = 0.25 × 0.1% = 0.00025 ETH
Collection and distribution of funding fees
Collection of funding fees by platform | When collecting funding fees, OKX will collect the full amount of outstanding funding fee, even if this goes beyond the liquidation threshold (i.e. where margin level falls below 100%) Partial or full liquidation will be carried out thereafter if required. Isolated margin mode Funding fee will be collected solely from the margin balance of your isolated positions, instead of transferable balance in your cross-margin account. Orders will not be cancelled during collection If the margin balance is insufficient, partial or full liquidation will be carried out thereafter if required. Cross margin mode (Single-currency, Multi-currency, Portfolio margin) Funding fee is collected from the cross margin equity. Orders will not be canceled during collection. If the cross margin equity is insufficient, partial or full liquidation will be carried out thereafter if required. |
Distribution of funding fees by platform | The platform will distribute the full amount to users during settlement. Isolated margin mode For isolated margin positions, the funding fee will be added into the margin balance of the position. Cross margin mode (Single-currency, Multi-currency, Portfolio margin) For cross margin positions, the funding fee will be added to their cross margin equity. |