💰Funding Rate
Last updated
Last updated
The funding rate plays a crucial role in keeping the perpetual contract price aligned with the spot price. The fundamental principle is as follows: when the contract price exceeds the index price, long position holders compensate short position holders; conversely, when the contract price is below the index price, short position holders compensate long position holders.
In the LPMM model, built upon the pricing mechanism outlined in the preceding section, the dynamics are as follows: if liquidity providers (LPs) hold short positions, long position holders compensate short position holders; on the other hand, if LPs hold long positions, short position holders compensate long position holders.
Some of the concepts and rates are explained here, and you can also click on VIEW DETAILS for more information.
Funding(Hour): Funding Fee hourly rate,charged per second on position size. Positive=Long pay,Short earn Negative=Short pay,Long earn
Principal: Principal is the total capital invested, including fees, when opening a position
Initial Margin: Initial Margin is the margin initially allocated to this position. Initial Margin = Principal - Open Fee Entry Price: In order to protect the price from being manipulated,the Entry Price of the market order will use Mark Price+/- Spread to open the position. The Sell slippage for BTCUSD is 0.01% Liq.Price: The position will be liquidated when the initial margin (after deducting the fee) reaches a loss of 90%（Each pair will be slightly different, depends on liquidity） Open Fee: Open fee = 0.08%* your position size Close Fee: Close fee = 0.08%* your position size Net Profit: Net Profit is the profit and loss obtained after taking into account the trader's principal and trading fees. Net Profit = Realized PNL - Open Fee - Close Fee
Realized PNL: Realized PNL only calculates the profit and loss generated after the position is successfully opened. Long : Realized PNL = (Close Price - Entry Price) * Qty + Funding Fee Short : Realized PNL = (Entry Price - Close Price ) * Qty + Funding Fee
Realized ROI: Realized ROI = Realized PNL / Initial margin * 100%
