Funding Fees

btcc.comBTCC Support10 months ago

A. Introduction of Funding Fees

The funding fee is the core operating mechanism of BTCC perpetual futures.

The setting of the funding fee aims to ensure that the transaction price of the perpetual futures closely follows the underlying reference price through the regular exchange of funding fees between the long and short traders.

B. Description of Funding Fees

1. BTCC does not take any funding fees, which are collected between users.

2. Funding fees are applied every 8 hours, specifically at 01:00, 09:00, 17:00 (UTC). As long as you have open positions at these three specific times, funding fees will be automatically applied to the open trades.
For a better user experience, we will calculate the fees without suspending your transactions. Therefore, during the funding fee collection period, there may be delays in calculation. For example, you may still be charged or paid if you open or close your positions at 09:00:05.

3. Funding fees are charged by deducting the fixed margin of the user's position up to the amount that the user's margin rate is equal to the maintenance margin rate and a certain percentage of the remaining balance, and the remaining balance will not be charged again. The actual funding fee that the user can receive also depends on the total amount deducted from the counterparty's account by the system.

C. Funding Fee Calculations

1. The formula for calculating the funding fee that you pay or receive is as follows:
Funding Fee = Funding rate × position value
The value of your position has nothing to do with leverage and is not based on how much margin you have allocated to that position:

2. The funding rate calculation formula is as follows:

Funding rate = {average premium index (P) + Clamp[interest rate (I) − average premium index (P), a, b}

The interest rate index I=0.01%. The average of the average premium index P is the simple average of the premium index, and the premium index reflects the premium relationship between the contract price and the spot index price. The specific formula is as follows:

Premium index = [Max(0, Impact bid price-price index)-Max(0, benchmark price-Impact ask price)] / benchmark price

The premium index is calculated every minute.

1) Impact bid and ask prices
Impact bid price = the average price when the buying queue reaches the "Impact Guaranteed Amount"
Impact ask price = the average price when the selling queue reaches the "Impact Guaranteed Amount"

2) Impact Guarantee Amount
The impact guarantee amount refers to the amount that can be traded with a margin of 200 USDT.
The specific formula is as follows:
Impact guarantee amount = 200 USDT / minimum maintenance margin rate
Example: The minimum maintenance margin rate of BTCUSDT is 0.5%
Then the impact margin amount of the BTCUSDT contract=200USDT/0.5%=40000USDT

D. Unusual Circumstances

When there are major shifts in the market, BTCC reserves the right to modify the maximum and minimum limits of the funding rate and raise the number of funding fee application times from three times daily to more than three.