Funding cost calculation

2022-11-25

1. The formula for calculating the fee that you receive or pay is as follows:

Funding cost = rate * position value

The value of your position has nothing to do with leverage and is not based on how much margin you have allocated to that position:

Forward contract position value = face value * number of contracts * latest marked price

Reverse contract position value = face value * number of contracts / latest marked price

2. The formula for calculating the funding rate is as follows:

Funding rate (F) = premium index (P) + clamp (interest rate (I) - premium index (P), 0.05%, -0.05%)

When the funding rate is positive, the longs pay the shorts; when the funding rate is negative, the shorts pay the longs.

1) Interest rate

The interest rate depends on the borrowing rate of the base currency and the quoted currency itself.

Interest rate (I) = (pricing interest rate index - base interest rate index) / funding rate interval

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