In one article, learn about: What is the virtual currency fund rate and how to use the fund rate to trade

The virtual currency fund rate is a fee charged to traders holding positions in derivatives trading. It reflects a premium or discount between the spot market price and the futures contract price when the contract expires. When the spot price is higher than the futures price, the capital rate is negative, which means that traders who short positions pay fees to traders who long positions. On the contrary, when the spot price is lower than the futures price, the capital rate is positive, which means that traders who do long positions pay fees to traders who do short positions.

A article is about: What is the virtual currency fund rate?

1. Introduction to virtual currency fund rate?

Virtual currency Fund rate, also known as fund interest rate, refers to the funds exchange fee between long (holding bullish positions) and short (holding bearish positions) in perpetual contract trading. This fee is settled at intervals based on the contract's capital rate to maintain a balance between the contract price and the spot price.

2. Principle of calculating fund rate

The calculation of fund rate is based on the fund pool of perpetual contracts, which is a fund pool with funds owned by the contract transaction. The long and short sellers deposit funds into the fund pool, and the resulting fund interest will be used to pay the fund rate. The calculation formula for the capital fee rate is:

资金费率 = (多头利息 - 空头利息) / 总合约价值

Among them, long interest and short interest are both calculated at annual interest rates, and the total contract value is the sum of the values ​​of all open contracts.

3. Positive capital rate and negative capital rate

According to the interest spread between long and short, capital rate can be divided into positive capital rate and negative capital rate:

Positive capital rate: If the long interest is greater than the short interest, the capital rate is positive. In this case, the shorts must pay the funding rate to the longs. This means that traders holding long positions will receive funds from short positions, thereby encouraging short selling.

Negative fund rate: If the short interest is greater than the long interest, the fund rate is negative. In this case, the longs must pay the funding rate to the shorts. This means that traders holding short positions will receive funds from long positions traders, thereby encouraging long positions.

4. Impact of capital rate on contract price

The capital rate has an important impact on the price of a perpetual contract. Positive capital rates encourage short selling, which will reduce the contract price. Negative capital rates encourage longing, which will lead to higher contract prices. Therefore, the capital rate helps maintain a balance between the contract price and the spot price.

5. Factors that affect capital rates

Factors that affect capital rates include:

Supply and demand balance in the spot market: If in the spot market If the demand is greater than the supply, the price of virtual currency will rise, the bulls will be more favorable, and the capital fee rate will be positive.

Supply and demand relationship in the futures market: If the short position in the futures market is greater than the long position, the capital fee rate will also be positive.

Exchange policy: Exchanges can adjust the calculation method and settlement schedule of the fund rate to affect the fund rate.

6. Impact of capital rate on transactions

Fund rate will have the following impact on traders:

Impact position risk: Positive funds The fee rate will increase the risk of short positions, and the negative capital rate will increase the risk of long positions.

Trading cost impact: If the funding rate is opposite to the trader's position direction, it will increase the transaction cost.

Arbitrage Opportunities: Funding rates can create arbitrage opportunities for traders. For example, if the funding rate is positive, traders can earn fees by shorting.

7. How to trade using capital rates

Traders can use capital rates to make trading decisions:

Trend tracking: Fund rates can be Help traders identify trends. If the funding rate continues to be positive, it indicates bearish market sentiment and vice versa.

Determine buying and selling points: Fund rate can help traders determine buying and selling points. For example, if the funding rate is negative, it may be a buying opportunity.

Risk Management: Funding rates can help traders manage risks. Traders should always consider the impact of capital rates on positions and take appropriate risk management measures.

8. Pay attention to potential risks

When using capital rates to trade, you should pay attention to the following potential risks:

Fund rate fluctuations: Fund rate may fluctuate significantly, which will affect traders' profitability.

Exchange Differences: Different exchanges may use different fund rate calculation methods and settlement schedules, which may cause traders to face different fees.

Liquidation risk: If the fund rate is opposite to the trader's position direction and fluctuates greatly, liquidation may be triggered.

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