IV. Introduction to perpetual swap funding fee

OKX perpetual swap applies a funding fee mechanism to keep the market price of the perpetual market anchoring the spot index price.

The funding fee is charged every 8 hours at the time of daily settlements, at 00:00, 08:00, and 16:00 (UTC) (The actual charging time may last 1 min. Each instrument will be accomplished in mini-second level. Please refer to the actual charges as a result). Users need to pay or receive the funding fee only when they have holdings. If you close your position prior to the charging of the funding fee, then you don’t need to pay the funding fee. (If there is a situation where the contract is delisted in advance before settlement, there is no need to pay the current funding fee.)

1. Theoretical funding fee

Funding fee = position value * current funding rate

If the funding rate is positive, the longs pay the funding fee to the shorts. If negative, the shorts pay to longs.

Funding rate = Clamp [MA(Premium Index - Interest), a, b]

• Interest = 0
• Premium Index = [(Best Bid + Best Offer) / 2 - Spot Index Price] / Spot Index Price
• MA means moving average. Here it refers to a succession of premium index averages from the start point of this period to the current moment.
  Example: MA(Premium Index of Tn) = (Premium Index at T1 + Premium Index at T2 +...+ Premium Index at Tn) / n

The funding rate is updated every minute. The funding rate at 07:59, 15:59, 23:59 (UTC) will be used for funding exchange.

The values of a and b are as follows:

[The above data and indicators may be adjusted in real time according to market conditions, adjustments will not be notified in advance.]

2. Actual funding fee

Single currency cross margin mode: During funding, the fee will be charged directly from the available equity of the Single currency account. If the available equity is insufficient, all pending orders that increase the used margin will be canceled, including all spot orders, isolated and cross margin orders. However, the maximum funding fee is capped when the Margin = Maintenance margin + Liquidation fee.

Multi-currency cross margin mode: During funding, the fee will be charged directly from the adjusted equity of the multi-currency account. When the adjusted equity is insufficient, all pending orders that reduce the adjusted equity will be canceled, including spot orders and all isolated margin orders. However, the maximum funding fee is capped when the Margin = Maintenance margin + Liquidation fee.

Isolated margin mode: During funding, the fee will first be charged from the transferable balance of cross margin account. Transferable balance of cross margin account depends on the account mode. Under multi-currency cross margin with auto borrow mode, the transferable balance includes the borrowing amount. If the transferable balance is insufficient, all orders to open isolated margin contract positions will be cancelled and fees will be deducted from the margin of the isolated position. However, the maximum funding fee is capped when the Margin = Maintenance margin + Liquidation fee.

So, the actual funding fee to be received by a user depends on the amount taken by the system from the counterparty.

3. Fee deduction order

If a user holds multiple perpetual positions charged for the funding fee in a USDT single-currency account or multi-currency cross margin account, the fee deduction will be executed in the order of the currency list, and will last until the user's margin becomes equal to the maintenance margin + liquidation fee. The excessive part will not be charged for the funding fee.