What is the overnight fee for OKEx perpetual contracts?

OKEx perpetual contracts charge an overnight fee for positions held overnight, calculated using the daily funding rate multiplied by the notional value of the position.

Oct 22, 2024 at 05:11 am

OKEx Perpetual Contracts Overnight Fee Explained

1. Overview

OKEx perpetual contracts are a type of futures contract that allows traders to speculate on the future price of an asset without having to take physical delivery of the underlying asset. These contracts charge an overnight fee for positions held overnight.

2. Calculation of Overnight Fee

The overnight fee is calculated as the daily funding rate multiplied by the notional value of the position. The daily funding rate is determined by the difference between the perpetual contract price and the spot price of the underlying asset.

3. Funding Rate Formula

Funding Rate = (Perpetual Contract Price - Spot Price) / 86,400

4. Overnight Fee Calculation

Overnight Fee = Funding Rate x Notional Value

5. Notional Value

The notional value of a perpetual contract is the contract value that is multiplied by the price to determine the profit or loss of the position. The notional value is usually expressed in the quote currency of the contract.

6. Funding Rate Schedule

OKEx perpetual contracts have a funding schedule that determines the time at which the overnight fee is applied. The funding schedule for Bitcoin perpetual contracts is as follows:

- 04:00 UTC
- 12:00 UTC
- 20:00 UTC

7. Positive and Negative Funding Rates

The funding rate can be either positive or negative. If the funding rate is positive, perpetual contract traders who are long on the contract will pay an overnight fee to traders who are short on the contract. Conversely, if the funding rate is negative, traders who are short on the contract will pay a fee to traders who are long on the contract.

8. Example

Suppose the Bitcoin perpetual contract price is $20,000, and the spot price of Bitcoin is $19,900. The daily funding rate would be:

Funding Rate = (20,000 - 19,900) / 86,400 = 0.0011574

If a trader has a long position worth $1,000 in this contract, the overnight fee would be:

Overnight Fee = 0.0011574 x 1,000 = 1.1574

9. Conclusion

The overnight fee for OKEx perpetual contracts is an important consideration for traders who wish to hold positions overnight. The fee can have a significant impact on the profitability of a trading strategy.