KCEX Futures Funding Rate Mechanism: Calculation, Settlement Times, and How to View Funding Rates

The funding rate is an important mechanism used by perpetual futures to keep futures prices reasonably anchored to spot index prices. Long and short traders periodically pay funding fees to one another based on the funding rate. This article explains the definition and purpose of the KCEX perpetual futures funding rate, the funding fee calculation formula, settlement times and collection rules, and how to view current and historical funding rates and funding fee records, helping you quickly understand the perpetual futures funding rate mechanism.

1. Definition of the Funding Rate

The funding rate is a mechanism unique to perpetual futures. Its purpose is to keep futures prices anchored to spot prices and prevent prolonged price deviations.

Based on the difference between perpetual futures prices and spot prices, the platform calculates a funding rate. Long and short traders periodically pay funding fees to one another based on this rate. KCEX does not charge any fees from these payments.

• When the market trend is bullish, the funding rate is positive, and long traders pay funding fees to short traders.
• When the market trend is bearish, the funding rate is negative, and short traders pay funding fees to long traders.

Funding Fee Formula:

Funding Fee = Position Size at the Snapshot Time × Mark Price × Funding Rate

2. Purpose of the Funding Rate

Perpetual futures are derivative products. However, because they do not have an expiry or settlement date, a funding rate is required to keep futures prices anchored to spot prices and prevent prolonged and significant deviations between the two.

When most traders in the market hold positions in the same direction, the futures price may deviate from the spot index price, potentially causing abnormal market volatility. The funding rate requires the side benefiting from the price deviation to periodically pay funding fees to the opposite side, thereby creating a cost for maintaining the position. This economic incentive influences traders’ behaviour and helps realign the futures price with the spot price.

This mechanism helps prevent excessive market price volatility and reduces the possibility of market manipulation. For experienced traders, funding rates may also provide additional profit opportunities.

3. How to View Current and Historical Funding Rates

(1) View the Current Funding Rate

1.1 Market Overview

On the futures trading page, you can view the funding rate and settlement countdown for the current trading pair directly in the Market Overview section. Funding rates vary between futures trading pairs, and their settlement times may also differ.

1.2 Real-Time Funding Rate Page

You can also select Futures Information > Real-Time Funding Rate from the top menu bar of the futures page to access the Real-Time Funding Rate page. On this page, you can view the current funding rates for all futures or search for a specific futures pair.

(2) View Historical Funding Rates

From the top menu bar of the futures trading page, select Futures Information > Funding Rate History to access the Funding Rate History page.

On this page, you can view a chart showing funding rate trends over the past 7 or 14 days, as well as all historical funding rate settlement data.

4. Funding Rate Settlement Times and Collection Rules

Funding fees for KCEX futures are generally settled every 8 hours at 00:00, 08:00, and 16:00 (UTC) each day. Traders will only pay or receive the corresponding funding fees if they hold a position at the settlement time. If a trader does not hold any position at the settlement time, no funding fees will be paid or received.

Please note:

• As funding fees for all positions must be settled in batches, system processing may be delayed by up to approximately 15 seconds. If a trader opens a position shortly after the settlement time—for example, at 16:00:05—the position may still be included in the current funding fee settlement, regardless of whether the trader is the payer or recipient.
• Funding fee settlement times may differ for certain futures trading pairs. Please refer to the information displayed on the relevant product page.

5. How to View Funding Fee Payment and Receipt Records

Go to Capital Flow on the futures trading page or the futures order history page, and select Funding Fee as the fund type to view all records of funding fees paid or received.

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