Funding
Last updated
Last updated
Funding rates are designed to help balance the positions between longs and shorts. Dynamically adjusted depending on overall positions in a trading pair, they can either be positive (resulting in traders paying a funding rate) or negative (traders receive the funding rate).
The current funding rates for each trading pair are displayed above the chart, as per the example here:
In this example, for the BTC/USD pair, at the time of writing, the current funding rates are 0.23% / -0.45%. Traders who are Long will therefore pay a 0.23% fee on their positions in each 24 hour period. By contrast, traders who take a Short position will earn a funding rate of 0.45% on their positions in each 24 hour period.
The funding rate should therefore be taken into consideration when opening a position, particularly in respect of time, as the total funding which is paid (or earned) is dependent on the length of time a position is held.
When you open a trade exactly at that point your position is subject to funding. Every time there is an action on the Surge protocol your funding is updated making it in essence realtime. The settlement of the funding (either the pool owes you USD or you owe the pool USD) only happens when you trade any amount in that specific pair. Example position, Long 1.5 SOL
The funding at the top says i'm paying 0.66% per day:
Next if you do a trade in SOL/USD it will square up the funding. In this case the account will pay some funding. For simplicity in this example, we close the entire position...
Now we can see the closing trade (top line), but more importantly (in this example) it can be seen that the Funding has been settled -0.11 USD which is 1 hour of funding at 0.6646% per day
Carefully looking at the numbers we can see it doesn't add up!
BTC Longs 0.90762 (87,724 USD) are paying 0.2659% over 24 hours = 233 USD
BTC Shorts 0.97282 (94,026 USD) are earning 0.2045% over 24 hours = 192 USD
So where are the other 41 USD going? Eh Viola, the Surge USD pool is earning it...
