Many perpetual contract users encounter a puzzling situation: their position remains unchanged, yet the position margin fluctuates—sometimes decreasing or increasing. This phenomenon primarily stems from the funding fee mechanism and market price volatility inherent in perpetual contracts.
Funding Fee Mechanism
Perpetual contracts use a funding fee mechanism to anchor the contract's market price to the spot price.
Typically, platforms like OKX charge or pay funding fees every 8 hours at 8:00, 16:00, and 24:00 (UTC+8). Some contracts may have fees applied every 2 or 4 hours instead.
Only users holding positions at the time of fee collection will pay or receive funding fees. If a position is closed before the fee collection, no funding fee applies.
Calculating Funding Fees
Funding Fee = Position Value × Current Funding Rate
- When the funding rate is positive, longs pay shorts.
- When the funding rate is negative, shorts pay longs.
Thus, every perpetual contract holder may either pay or receive funding fees. The actual amount received depends on the total deducted from counterparty accounts.
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Cross-Margin Mode
Position Margin = (Face Value × Contracts × Latest Mark Price) / Leverage
Since the opening margin fluctuates with price changes, the impact of funding fees on margin is relatively minor.
It's important to note that OKX does not charge funding fees—these fees are exchanged directly between users.
FAQs
1. Can funding fees make my margin negative?
No, funding fees are deducted from available balance, not margin. However, extreme market conditions could affect liquidation risks.
2. Why do funding rates change?
Funding rates adjust based on the difference between perpetual contract prices and spot prices, balancing demand between longs and shorts.
3. How can I minimize funding fee costs?
Monitor funding rates and consider closing positions before high-fee intervals if the rate is unfavorable.
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By understanding these mechanisms, traders can better manage their positions and anticipate margin fluctuations without unnecessary concern.