Is the overnight stay fee high for perpetual contracts? How many exactly are there?

Fund costs of perpetual contracts: Detailed explanation of influencing factors and calculation methods

In perpetual contract transactions, both parties to the transaction will pay or charge fees to each other according to the capital rate. This fee is usually called "fund fee" or "position fee". Its function is to keep the price of the perpetual contract consistent with the spot price and avoid long-term deviation. This article will conduct in-depth discussion on the level of funds for perpetual contracts and the specific calculation methods.

Is the funding cost high?

Generally speaking, the funding fee of perpetual contracts is not high, but the specific amount and collection frequency are affected by market conditions and trading platform rules. The charging standards and methods of different exchanges vary greatly. Some exchanges may set higher fees to encourage short-term positions, while others use lower fees to attract long-term investors.

Factors that affect funding costs include:

• Fund cost of exchange: Exchanges need financing to support leveraged trading, and the financing cost directly affects funding costs. The higher the financing cost, the higher the expenses may be.
• Trading strategies and risk tolerance: Short-term traders try to avoid overnight positions, and their capital expenses are relatively low; long-term investors need to include capital expenses in cost considerations.
• Market volatility: High volatility markets may lead to significant increase in capital expenses.

What is the specific funding fee?

The specific amount and frequency of collection of funds are determined by market conditions and platform regulations. Take Ouyi as an example. The perpetual contract fund fee is 0.02% when placing an order and 0.05% when placing an order, and is charged every 12 hours (usually after the contract settlement is held at 10:00 and 22:00 every day). Only holding positions at these points in time is subject to payment or charge.

Fund expenses will affect transaction costs, and their positive and negative depend on the comparison between the contract price and the spot price:

• Contract price is higher than spot price: The capital rate is positive, and the long pays the short.
• Contract price is lower than spot price: The capital rate is negative, and the shorts pay the longs.

The capital fee rate is not a fixed value and will be dynamically adjusted according to the market's long-short ratio.

Summary:

The perpetual contract itself does not have a traditional overnight fee, but the capital rate plays a similar role. Under normal circumstances, the funding rate is low, but the high volatility market may lead to a significant increase. Investors are advised to choose top exchanges with transparent rates and fierce competition in handling fees (such as Binance and Ouyi), and avoid high leverage holdings when the capital fee rate is too high, especially long-term holdings. Choosing the right exchange and strategy and effectively managing fund fees is the key to the success of perpetual contract trading.

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