Hidden Costs in Perpetual Contracts: Are you paying or getting paid every 8 hours?
$ETHFI is up 12.5% today, trading at 0.7795 USDT. For friends holding perpetual contracts—do you know that every 8 hours there is a "rent" charged/settled?
The funding rate is like rent collected by a landlord. In the perpetual contract market, when the contract price is higher than the spot price, longs pay shorts a "rental"; when the contract price is lower than the spot price, shorts pay longs.
Assume the spot price for $ETHFI is 0.78 and the futures price is 0.8. If the funding rate is positive, then the longs have to pay the shorts every 8 hours. The higher the rate, the more expensive this "rent".
For friends holding long positions in $ETHFI : if the funding rate is 0.01%, then with a 100,000 USDT position, you would pay 100 USDT "accommodation fees" every 8 hours. Conversely, shorts can earn this money.
This is why, when some coins suddenly surge or crash, the funding rate can reach 0.1% or even higher—equivalent to an extra daily cost of about 3%!
$ETHFI #Binance #合约 #Cryptocurrency
$ETHFI is up 12.5% today, trading at 0.7795 USDT. For friends holding perpetual contracts—do you know that every 8 hours there is a "rent" charged/settled?
The funding rate is like rent collected by a landlord. In the perpetual contract market, when the contract price is higher than the spot price, longs pay shorts a "rental"; when the contract price is lower than the spot price, shorts pay longs.
Assume the spot price for $ETHFI is 0.78 and the futures price is 0.8. If the funding rate is positive, then the longs have to pay the shorts every 8 hours. The higher the rate, the more expensive this "rent".
For friends holding long positions in $ETHFI : if the funding rate is 0.01%, then with a 100,000 USDT position, you would pay 100 USDT "accommodation fees" every 8 hours. Conversely, shorts can earn this money.
This is why, when some coins suddenly surge or crash, the funding rate can reach 0.1% or even higher—equivalent to an extra daily cost of about 3%!
$ETHFI #Binance #合约 #Cryptocurrency