Funding fee mechanism
At OKX, our Futures adopt a funding fee mechanism designed to align the market price of the Futures market with the index price.
When the funding rate is positive, traders with long positions pay a funding fee to traders with short positions. Conversely, when the funding rate is negative, traders with short positions pay a funding fee to traders with long positions. Note that our platform only facilitates the exchange of funds between traders and doesn't charge any service fees under this mechanism.
The funding fee will be charged or paid out every 8 hours (00:00, 08:00, and 16:00 UTC) by default, unless specified otherwise (i.e. every 1, 2 or 4 hours). For each Futures contract, fees are assessed within milliseconds and trading won't be interrupted. You're obligated to pay or receive the funding fee if you hold open positions at the point of fee assessment. If you close your position before the funding fee assessment, you're exempt from paying or collecting the fee. Additionally, if an Futures contract is delisted before the assessment, the current cycle's funding fee becomes void. The actual fee assessment may take up to a minute. For example, if you open a position at 00:00:20 UTC, you could still be subject to the funding fee (either collecting or distributing the funding fee) if the fee assessment has yet to end.
The funding fee settlement time may be adjusted in real-time according to market conditions.
Funding rate calculation
Funding rate = clamp [Average premium index + clamp (Interest rate – Average premium index, 0.05%, -0.05%), Funding rate cap, Funding rate floor]
Interest rate = 0.03% / (24 / Settlement interval)
Taking a BTCUSD Futures contract as an example, the settlement interval is 8 hours, so the interest rate is 0.01% at each settlement.
For more information on the cap and floor, refer to this page.
Premium index = [Max (0, Impact bid price – Index price) – Max (0, Index price – Impact ask price)] / Index price
The average premium index is calculated using a weighted moving average of the premium index over the last settlement interval.
For example: Average premium index at Tn = (1 × Premium index at T1 + 2 × Premium index at T2 + ... + n × Premium index at Tn) / (1 + 2 + ... + n). Assuming the settlement interval of a Futures contract contract is 8 hours, the funding rate at 07:59 will be calculated using the premium index for every minute between 00:00 to 07:59. In other words, n = 480.
Impact bid/ask price is the average fill price to execute the impact value on the bid/ask price.
Impact bid/ask price = Impact value / Total base amount required to meet impact value
Impact value = 200 × Max leverage allowed for this X-Perps
The funding rate used to calculate the funding fee during fee assessment will be the most recent funding rate that was calculated in the previous minute before fee assessment.
For example, the fee assessment at 16:00 will use the funding rate calculated at 15:59.
Impact bid price calculation using BTCUSD Futures as an example:
Assuming impact value = 20,000 USD
Bid order book level | Bid price | Base amount in each order book level (BTC) | Calculation |
1 | 90,000 | 0.02 | Value of orders up to this level = 90,000 × 0.02 = 1,800 USD The entire base amount of 0.02 BTC at this level will be used for impact bid price calculation. |
2 | 89,900 | 0.06 | Value of orders up to this level = Value of orders in bid 2 + Value of orders in bid 1 = 89,900 × 0.06 + 1,800 = 7,194 USD The entire base amount of 0.06 BTC at this level will be used for impact bid price calculation. |
3 | 89,700 | 0.16 | Value of orders up to this level = Value of orders in bid 3 + Value of orders in bid 1 and 2 = 89,700 × 0.16 + 7,194 = 21,546 USD Impact value required for this level = 20,000 – 7,194 = 12,806 USD Amount required from this level (BTC) = 12,806 / 89,700 = 0.14276 BTC Impact bid price = 20,000 / (0.02 + 0.06 + 0.14276) = 89,780.8 USD |
Impact ask price calculation using BTCUSD Futures as an example:
Ask order book level | Ask price | Base amount in each order book level (BTC) | Calculation |
1 | 90,000 | 0.02 | Value of orders up to this level = 90,000 × 0.02 = 1,800 USD The entire base amount of 0.02 BTC at this level will be used for impact ask price calculation. |
2 | 90,100 | 0.06 | Value of orders up to this level = Value of orders in ask 2 + Value of orders in ask 1 = 90,100 × 0.06 + 1,800 = 7,206 USD The entire base amount of 0.06 BTC at this level will be used for impact ask price calculation. |
3 | 90,200 | 0.16 | Value of orders up to this level = Value of orders in ask 3 + Value of orders in ask 1 and 2 = 90,200 × 0.16 + 7,206 = 21,638 USD Impact value required for this level = 20,000 – 7,206 = 12,794 USD Amount required from this level (BTC) = 12,794 / 90,200 = 0.14184 BTC Impact ask price = 20,000 / (0.02 + 0.06 + 0.14184) = 90,154.9 USD |
Funding fee calculation
Funding fee = Position value × Funding rate
USD-margined Futures
Position value = Number of contracts × Contract size × Contract multiplier × Mark price
Example:
You have a long position of 10 BTCUSD Futures contract with a current mark price of 60,000 USD, 0.01 BTC face value per contract, and the funding rate is 0.1%.
Position value = 60,000 × 10 × 0.01 × 1 = 6,000 USD
Funding fee (platform collects) = 6,000 × 0.1% = 6 USD
Crypto-margined Futures
Position value = Number of contracts × Contract size × Contract multiplier / Mark price
Example:
You have a short position of 100 ETHUSD Futures contracts with a current mark price of 4,000 USD, 10 USD face value per contract, and the funding rate is 0.1%.
Position value = 100 × 10 × 1 / 4,000 = 0.25 ETH
Funding fee (platform distributes) = 0.25 × 0.1% = 0.00025 ETH
Collection and distribution of funding fees
Collection of funding fees by platform | When collecting funding fees, OKX will collect the full amount of outstanding funding fees, even if this goes beyond the liquidation threshold (i.e. where margin level falls below 100%). Partial or full liquidation will be carried out thereafter if required. Isolated margin mode Funding fee will be collected solely from the margin balance of your isolated positions, instead of the transferable balance in your multi-asset margin account. Orders will not be canceled during collection. If the margin balance is insufficient, partial or full liquidation will be carried out thereafter if required. Selected margin Funding fees are collected from multi-asset margin equity. Orders will not be canceled during collection. If the multi-asset margin equity is insufficient, partial or full liquidation will be carried out thereafter if required. |
Distribution of funding fees by platform | The platform will distribute the full amount to you during settlement. Isolated margin mode For isolated margin positions, the funding fee will be added into the margin balance of the position. Selected margin mode For selected margin positions, the funding fee will be added to their portfolio-margin equity. |
Disclaimer:
This content is provided for informational purposes only and may cover products that are not available in your region. It does not constitute investment or financial product advice, not it is a recommendation or solicitation to buy or sell financial instruments or to engage in any specific trading strategy.
Trading in financial instruments involves a significant risk of loss and may not be suitable for all investors. If you invest in X-Perps or other derivatives you may lose some or all of the money you invest. X-Perps are leveraged instruments; leverage can amplify both gains and losses. The value of investments and any income derived from them can go down as well as up, and you may not recover the amount originally invested. Past performance is not a reliable indicator of future results. You should carefully consider your investment objectives, level of experience, and risk appetite before engaging in any trading activity.
OKX Europe Markets Ltd ("OEM"), which is authorised and regulated by the Malta Financial Services Authority (MFSA) under the Investment Services Act (Chapter 370 of the Laws of Malta) as a Investment Services Licence Holder (Licence No. OEML-15905).
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