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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.

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Key Definitions

  • 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)

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Calculation Formulas

FieldFormulaDescription
premium(max(0, railsBidPrice - indexPrice) - max(0, indexPrice - railsAskPrice)) / indexPricePremium, calculated every minute
fundingRateaveragePremium / timeFactor + interestRateComponentFunding 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.

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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.