Q: What are funding fees?
A: Funding fees are periodic payments made between users holding long and short positions in a perpetual futures contract to ensure the contract's price closely tracks the underlying asset's market price.
Q: How often are funding fees charged?
A: Funding fees are typically charged every 8 hours in perpetual swaps contracts. However, please note that it varies between the contracts traded and it is advisable to check through the contracts page.
Q: How are funding rates calculated on Flipster?
A: The funding rates are calculated as below:
Interest Rate(I) = (Interest Quote Index - Interest Base Rate)/Funding Interval
- Interest Quote Index = The interest rate for borrowing the quote currency
- Interest Base Index = The interest rate for borrowing the base currency
- Funding Interval = 24h/8h = 3
Q: How are funding fees calculated on Flipster?
A: The funding fees are calculated as below:
Funding Fee = Notional Value of Positions * Funding Rate
Notional Value of Positions = Quantity of Contract * Mark Price
Q: Where will the funding fees be charged or received in my account?
A: Funding fees will be charged or received directly from the margin balance of the Flipster account.
Q: What happens if I have insufficient funds to pay for funding fees?
A: If the margin balance is insufficient to pay for funding fees, the funding fees will be charged directly to the position margin. Please note that it will result in a higher risk of liquidation for the open position.
Q: Can I avoid funding fees?
A: No, funding fees are inherent to perpetual swap contracts. However, traders can avoid funding fees if they close the open position before the next funding timestamp. Please refer to the Funding Fees Article for more information.
Q: How do I know if I am going to be charged or receiving funding fees on the next funding timestamp?
A: As a general rule of thumb, long position holders will pay short position holders when the funding rate is positive and vice versa.
Please refer to the contracts page for more information on the funding rate for each symbol on the next funding timestamp.