This article contains the following sections:
Funding is the primary mechanism to ensure Zoomex’s last traded price is always anchored to the global spot price. It is similar to the interest cost of holding contracts in spot margin-trading.
On Zoomex,
- The funding fee is exchanged directly between buyers and sellers at the end of every funding interval*. Using an 8-hour funding time interval as an example funding will occur at at 16:00 UTC, 00:00 UTC, and 08:00 UTC.
- When the funding rate is positive, long position holders pay the short position holders. Likewise, when the funding rate is negative, short position holders pay the long position holders.
- Traders will only pay or receive a funding fee if they hold a position at one of these times.
- If positions are entirely closed prior to the funding exchange then traders will not pay or receive a funding fee.
- The funding fee charged will be deducted from the trader's available balance. In the event where trader has no sufficient available balance, the funding fee will be deducted from the position margin and the liquidation price of the position will be more prone to the mark price. The risk of liquidation will increase.
* Every trading symbol will have its own funding time interval and Zoomex may adjust the funding time interval based on the live market situation when there is a significant price gap between Last traded price and Mark Price.
Disclaimer: Due to the complexity of the funding fee settlement, the system may require a few seconds to complete all funding fee exchanges between buyers and sellers on the platform. Therefore, please take note that
- Opening/closing a position within 5 seconds before and after the funding timestamp does not guarantee its inclusion/exclusion to receive/payout funding fees in the stipulated funding timestamp
Please take note that Zoomex will not offer any reimbursements for such incidents as the counterparty of the trades would have also received/paid out the funding fees.
Inverse Contract
Take the example from the screenshot above, in about 8 hours time, the long position holders need to pay 0.01% funding rate to short position holders.
Funding Fee is calculated as follows:
Funding Fee = Position Value x Funding Rate
Position Value = Quantity of Contract/Mark Price
Example:
Trader A holds a long position of 10,000 BTCUSD contracts and the Mark Price is 8,000 USD at the funding timestamp with the current funding rate at 0.01%.
First, let’s calculate the Position Value:
Position Value = 10,000/8,000 = 1.25 BTC
With the Position Value, let’s calculate the Funding:
Funding Fee = 1.25 BTC x 0.01% = 0.000125 BTC
As the funding rate is positive (0.01%), the long position holders have to pay the short position holders. Hence, trader A has to pay a funding fee of 0.000125 BTC and a short position holder with the same quantity of contracts will receive 0.000125 BTC.
USDT Contract
Take the example from the screenshot above, the long position holders need to pay 0.01% funding rate to short position holders.
Funding Fee is calculated as follows:
Funding Fee = Position Value x Funding Rate
Position Value = Quantity of Contract x Mark Price
Example:
Trader A holds a long position of 10 BTC contracts and the Mark Price is 8,000 USDT at the funding timestamp with the current funding rate at 0.01%.
First, let’s calculate the Position Value:
Position Value = 10 x 8000 = 80,000 USDT
With the Position Value, let’s calculate the Funding:
Funding Fee = 80,000 x 0.01% = 8 USDT
As the funding rate is positive (0.01%), the long position holders have to pay the short position holders. Hence, Trader A has to pay a funding fee of 8 USDT and a short position holder with the same quantity of contracts will receive 8 USDT.
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