How much is the overnight fee for Bybit contract

The overnight fee for Bybit contracts is calculated based on the index price, mark price, contract value, and funding rate, and is typically charged or paid at 8:00 UTC each day.

Nov 22, 2024 at 03:41 am

How much is the overnight fee for Bybit contract?

Overnight fee, also known as funding fee, is a payment made by traders who hold positions overnight on a perpetual contract. The fee is designed to encourage traders to close their positions before the end of the trading day and to reduce the risk of market manipulation.

The overnight fee for Bybit contracts is calculated based on the following formula:

Overnight Fee = (Index Price - Mark Price) x Contract Value x Funding Rate

• Index Price: The index price is the reference price for the contract. It is typically derived from a weighted average of spot prices from multiple exchanges.
• Mark Price: The mark price is the price at which the contract can be settled at any given time. It is typically calculated as the weighted average of the bid and ask prices on the exchange.
• Contract Value: The contract value is the notional value of the contract. It is typically calculated as the product of the contract size and the underlying asset price.
• Funding Rate: The funding rate is the annualized percentage rate that is charged or paid to traders who hold positions overnight. It is typically determined by the supply and demand for the contract.

The overnight fee is typically charged or paid at 8:00 UTC each day. The fee is calculated based on the positions that are held at that time.

Here is a step-by-step guide on how to calculate the overnight fee for a Bybit contract:

1. Determine the index price. The index price can be found on the Bybit website or on third-party data providers.
2. Determine the mark price. The mark price can be found on the Bybit website or on third-party data providers.
3. Determine the contract value. The contract value can be found on the Bybit website or on third-party data providers.
4. Determine the funding rate. The funding rate can be found on the Bybit website or on third-party data providers.
5. Calculate the overnight fee. The overnight fee can be calculated using the formula provided above.

Example:

Let's say that you are holding a long position on a Bybit BTCUSD contract with a contract value of $10,000. The index price is $10,000 and the mark price is $10,010. The funding rate is 0.01%.

The overnight fee would be calculated as follows:

Overnight Fee = (10,000 - 10,010) x 10,000 x 0.01% = -$0.10

This means that you would pay an overnight fee of $0.10 for holding your position overnight.

The overnight fee is an important factor to consider when trading perpetual contracts. It can have a significant impact on your profitability, especially if you are holding positions for extended periods of time.