Funding

In our trading system, funding is calculated and credited to your account hourly. Funding calculation is a three-step process involving the premium, funding rate, and funding value.

Key Definitions

Term	Description
railsBidPrice	Highest bid price on Rails order book
railsAskPrice	Lowest ask price on Rails order book
indexPrice	Current market index price for the asset
averagePremium	1-hour average of the premium (see below)
timeFactor	1 (normalization factor in hours)
interestRateComponent	0.0000125 (interest cost adjustment)
minimumFundingRate	-0.04 (lower bound)
maximumFundingRate	0.04 (upper bound)
positionQuantity	Size of the position — positive for long, negative for short

Calculation Formulas

Field	Formula	Description
premium	(max(0, railsBidPrice - indexPrice) - max(0, indexPrice - railsAskPrice)) / indexPrice	Premium, calculated every minute
fundingRate	averagePremium / timeFactor + interestRateComponent	Funding rate, calculated hourly (bounded between minimumFundingRate and maximumFundingRate)
fundingValue	-(positionQuantity × indexPrice × fundingRate / 100)	Funding value, credited hourly

Understanding Funding Rates

• Positive fundingRate → Longs pay shorts
• Negative fundingRate → Shorts pay longs

The sign of the rate tells our system which side is “over-represented” or “under-represented”. When the rate is below zero, it means the position/contract is trading below the index price; shorts are effectively being subsidized to hold that position, so they must transfer the funding fee to longs.

Usage in API

Funding calculations are used in the Get Account Fundings response, where you can see the hourly funding credited to your account for each open position.