KAIA longs collected funding in the afternoon, but the position was still losing over the interval. If “earning rent by going long at a negative funding rate” is taken to mean the position is profitable, that overlooks price P&L.
At 17:08 Beijing time today, I checked Binance’s historical settlement records. Using the mark price in the 15:00 settlement record as the baseline, and assuming the long position size stayed unchanged with no price hedge, the price P&L was about -2.1% when accounting only for the 16:00 and 17:00 funding payments and valuing the position at the mark price in the 17:00 settlement record. This is the accounting for a settled interval; the mark price is not the actual entry or exit price.
Under the official formula, funding credited to a long = -settlement mark price × position size × funding rate. The actual rates at 16:00 and 17:00 were both negative. The income, converted using the starting position’s notional value, totaled about 0.6%.
Combining the figures using unrounded data gives a result of about -1.6%, before fees and slippage. The denominator throughout is the starting position’s notional value. “Earning rent” describes the direction of the cash flow; how much price loss it offsets determines whether this position made money over the interval.
$KAIA #FuturesWatch
At 17:08 Beijing time today, I checked Binance’s historical settlement records. Using the mark price in the 15:00 settlement record as the baseline, and assuming the long position size stayed unchanged with no price hedge, the price P&L was about -2.1% when accounting only for the 16:00 and 17:00 funding payments and valuing the position at the mark price in the 17:00 settlement record. This is the accounting for a settled interval; the mark price is not the actual entry or exit price.
Under the official formula, funding credited to a long = -settlement mark price × position size × funding rate. The actual rates at 16:00 and 17:00 were both negative. The income, converted using the starting position’s notional value, totaled about 0.6%.
Combining the figures using unrounded data gives a result of about -1.6%, before fees and slippage. The denominator throughout is the starting position’s notional value. “Earning rent” describes the direction of the cash flow; how much price loss it offsets determines whether this position made money over the interval.
$KAIA #FuturesWatch