Overview
The Funding Rate is a periodic payment exchanged between Long and Short position holders in perpetual futures contracts.
The purpose of the funding mechanism is to help keep the perpetual contract price aligned with the underlying asset's market price.
Funding payments are exchanged between traders rather than being a trading fee charged by BKG Exchange.
How Does the Funding Rate Work?
The funding rate can be positive or negative depending on market conditions.
Positive Funding Rate
When the funding rate is positive:
Long positions generally pay Short positions.
This usually occurs when the perpetual contract price is trading at a premium relative to the underlying market.
Negative Funding Rate
When the funding rate is negative:
Short positions generally pay Long positions.
This usually occurs when the perpetual contract price is trading below the underlying market.
How Is the Funding Fee Calculated?
The funding fee is generally calculated based on your position value and the applicable funding rate.
Funding Fee = Position Value × Funding Rate
For example:
If your position value is 10,000 USDT and the funding rate is 0.01%:
10,000 × 0.01% = 1 USDT
The actual funding fee depends on the applicable funding rate and your position at the relevant funding time.
When Is the Funding Fee Paid?
Funding payments are settled at the scheduled funding time for the relevant perpetual contract.
The funding interval may vary depending on the contract and current platform configuration.
You can check the applicable funding rate and next funding time on the futures trading interface.
Where Can I Check the Funding Rate?
On the BKG Exchange futures trading page:
- Open the relevant perpetual futures contract.
- Locate the Funding Rate information.
- Check the current funding rate.
- Check the next funding time if displayed.
The funding rate may change before the next funding settlement.
Important Notes
- Funding fees apply to supported perpetual futures contracts according to the applicable funding rules.
- Funding payments are exchanged between eligible Long and Short position holders.
- A positive funding rate generally means Long positions pay Short positions.
- A negative funding rate generally means Short positions pay Long positions.
- The funding rate can change based on market conditions.
- The actual funding amount depends on your position value and the applicable funding rate at the funding time.
- Funding fees are separate from regular trading fees.
- Make sure you understand the applicable funding rules before maintaining a leveraged position.
FAQ
Is the funding fee a trading fee?
No. Funding payments are generally exchanged between Long and Short position holders rather than being a regular trading fee charged by BKG Exchange.
Who pays the funding fee?
When the funding rate is positive, Long positions generally pay Short positions.
When the funding rate is negative, Short positions generally pay Long positions.
Can the funding rate change?
Yes. The funding rate can change based on market conditions and the calculation mechanism applicable to the contract.
Where can I see the next funding time?
The next funding time is displayed on the relevant futures trading interface when the information is available.
Does every futures contract have the same funding rate?
No. Funding rates can vary between different perpetual contracts and may change over time.
Does opening a position always mean I will pay a funding fee?
Not necessarily. Whether you pay or receive funding depends on the funding rate, your position direction, and whether you hold the position at the applicable funding settlement time.