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MCS | Funding Part 2: The Funding Settlement Is Closing In: What Will Be The Funding Fee For My Position?

a month ago

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Greetings from MCS, the derivatives trading platform where traders ALWAYS come first.

This is the second part of the funding fee.

If you have not completely grasped the concept of funding, please check the post below:

Funding Part 1: https://blog.mycoinstory.com/funding-en/

If I am getting the funding fee, how much will it be?

If you are to receive a funding fee, you can get the funding fee of "Position Value * Funding Rate".

For example, assuming that you are currently holding a long position and have entered 10,000 Bitcoin perpetual contracts at $10,000, and the funding rate is -0.01%, the value of this position is 1 BTC (10,000 (contract quantity) / 10,000 (entry price)). At this time, since the funding rate is -0.01%, 0.01 BTC, which is 0.01% of the position value of 1 BTC, will be paid at the time of settlement of the funding fee.

Conversely, if you are paying the funding fee, how much should you pay?

In the situation where you have to pay the funding fee, you must pay the funding fee equal to the "Position Value * Funding Rate".

For example, assuming that you are currently holding a short position and entered 10,000 Bitcoin perpetual contracts at $10,000, and the funding rate is 0.01%, the value of this position is 1 BTC (10,000 (contract quantity) / 10,000 (entry price)). At this time, since the funding rate is 0.01%, 0.01 BTC, which is 0.01% of the position value 1 BTC, is what you have to pay at the time of settlement of the funding fee.

Where will the funding fee be deducted from?

Funding fee payment is made automatically by the system and is set to be deducted from your available assets first. However, if there is insufficient or no balance in the available assets, it will be deducted from the margins of the current positions you hold. If there is no available asset and the funding cost is deducted from the position margin partially, the leverage of the position will rise, and the liquidation price will naturally change unfavorably as the leverage rises, so be sure to keep this in mind while trading!

❗️ If there is no available asset and you have to pay the funding fee, check your position carefully and deal with them strategically to avoid liquidation.

If you have any inquiries about funding fees, please contact us through the MCS Live Chat or MCS Telegram.

Traders ALWAYS come first on MCS.

Thank you.

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Published a month ago