How to calculate the funding fee for a position on Bybit?

Understanding the Funding Fee Mechanism on Bybit

The funding fee on Bybit is a periodic payment exchanged between long and short position holders in perpetual contracts. This mechanism ensures that the contract price stays close to the underlying spot market price. Unlike expiry-based futures, perpetual contracts do not have a settlement date, so the funding rate acts as a balancing tool. When the funding rate is positive, long position holders pay short position holders. Conversely, when the rate is negative, short position holders pay long position holders. This exchange occurs every 8 hours at 00:00 UTC, 08:00 UTC, and 16:00 UTC.

Funding fees are not a trading fee or commission charged by Bybit. Instead, they are peer-to-peer transfers between traders. Bybit facilitates the transfer but does not take a cut. The actual rate is determined by the difference between the perpetual contract’s market price and the underlying index price. If the contract trades at a premium, funding rates tend to be positive, incentivizing shorts. If it trades at a discount, rates turn negative, encouraging longs.

Components of the Funding Fee Formula

To calculate the funding fee for your position, you must understand the formula Bybit uses:

Funding Fee = Position Value × Funding Rate

Where:

• Position Value = Number of Contracts × Mark Price
• Funding Rate = Rate published by Bybit for that specific 8-hour period

The funding rate itself consists of two parts: the interest rate component and the premium index component. Bybit typically sets the interest rate at 0.01% per day (approximately 0.0033% every 8 hours), but this is often negligible compared to the premium index. The premium index reflects the deviation between the perpetual contract price and the index price. If the contract trades significantly above the index, the premium index increases, pushing the funding rate higher.

Bybit publishes the upcoming funding rate 1 hour before each settlement period. You can view this in the contract interface under the Funding Rate section. The actual rate applied is locked in 1 hour prior to settlement and remains fixed for that period.

Step-by-Step Calculation Example

Suppose you hold a long position of 10,000 USDT worth of BTCUSD perpetual contracts. The mark price is $60,000, and the upcoming funding rate is 0.01%.

• Determine the position value:
  • 10,000 USDT (already in USDT terms, so no conversion needed)
• Identify the funding rate:
  • 0.01% = 0.0001
• Apply the formula:
  • Funding Fee = 10,000 × 0.0001 = 1 USDT

Since the rate is positive and you are long, you will pay 1 USDT to short position holders at the next funding time.

Now, consider a short position of 5,000 USDT on ETHUSD with a funding rate of -0.005%.

• Position value: 5,000 USDT
• Funding rate: -0.005% = -0.00005
• Funding Fee = 5,000 × (-0.00005) = -0.25 USDT

Because the rate is negative and you are short, you will receive 0.25 USDT from longs.

Where to Find Funding Rate Information on Bybit

To access real-time funding data on Bybit, follow these steps:

• Log in to your Bybit account
• Navigate to the Derivatives section
• Select the desired market (e.g., USDT Perpetual or Inverse Perpetual)
• Choose a specific contract (e.g., BTCUSD)
• Locate the Funding Rate display near the price chart
• Check the Next Funding Time and Estimated Rate

The interface shows:

• Current Funding Rate: the rate applied in the ongoing 8-hour window
• Next Funding Rate Estimate: updated every minute, based on price convergence
• 24h Average Funding Rate: useful for assessing long-term cost trends

You can also use Bybit’s API to retrieve funding rate data programmatically. The endpoint https://api.bybit.com/v2/public/funding/prev-funding-rate returns historical rates, while https://api.bybit.com/v2/public/tickers includes the next funding rate estimate.

Impact of Leverage and Position Size on Funding Fees

Leverage does not directly affect the funding fee calculation, but it influences position value, which is a core component. For example, opening a 10,000 USDT position with 10x leverage requires only 1,000 USDT in margin, but the funding fee is still based on the full 10,000 USDT.

Similarly, larger positions result in proportionally higher fees. A 100,000 USDT long position at a 0.01% funding rate pays 10 USDT, ten times more than a 10,000 USDT position.

Partial closures affect future funding fees. If you reduce your position from 10,000 USDT to 6,000 USDT before the next funding time, only the remaining 6,000 USDT will be subject to the fee. The reduction must be confirmed on-chain or in the order book before the funding timestamp.

Frequently Asked Questions

Q: Does Bybit charge additional fees for funding payments?No. Bybit does not charge any fee for funding transfers. The entire amount paid by one side is fully received by the other. The platform only acts as an intermediary to settle the payment.

Q: What happens if I close my position before the funding time?If you close your position before the funding timestamp (e.g., 00:00 UTC), you will not be charged or receive any funding fee for that period. Funding is only applied to open positions at the moment of settlement.

Q: Can the funding rate change after I open a position?Yes. The funding rate fluctuates every minute based on market conditions. However, the rate that applies to your position is locked in 1 hour before the settlement time. For example, the rate at 07:00 UTC determines the fee at 08:00 UTC.

Q: Are funding fees applied to spot or delivery futures?No. Funding fees are exclusive to perpetual contracts. Spot trading and delivery futures (e.g., quarterly futures) do not have funding mechanisms.