Are there overnight fees for AscendEX contracts?

When holding futures contracts overnight, AscendEX charges overnight fees based on the funding rate and notional value, impacting both long and short positions' profitability and risk profile.

Nov 23, 2024 at 05:10 pm

Understanding Overnight Fees for AscendEX Contracts

What are Overnight Fees?

Overnight fees, also known as financing fees, are incurred when holding a futures contract position that extends into the next trading day. When you hold a position overnight, you are essentially borrowing funds from the exchange for the duration of that time. As such, the exchange charges an interest rate on the borrowed funds, which is reflected in the overnight fee.

Are There Overnight Fees for AscendEX Contracts?

Yes, AscendEX does charge overnight fees for contracts held overnight. These fees vary depending on the specific contract being traded and the size of the position held.

How Overnight Fees Work on AscendEX

• Overnight fees are calculated based on the current funding rate and the notional value of the contract.
• The funding rate is determined by the demand and supply of the contract in the market.
• A positive funding rate indicates that there is a greater demand for a contract, resulting in a fee being paid to short positions from long positions.
• Conversely, a negative funding rate indicates a higher demand for short positions, leading to a fee being paid from short positions to long positions.

Impact of Overnight Fees on Trading Strategies

Overnight fees can have a significant impact on trading strategies, particularly for positions held over extended periods. For example:

• Long Positions:Overnight fees can add to the cost of holding a long position, potentially reducing potential profits.
• Short Positions:Overnight fees can provide additional income for holding short positions, but can also increase the risk of losses if the funding rate becomes unfavorable.

Considerations for Managing Overnight Fees

To effectively manage overnight fees, consider the following:

• Market Conditions: Monitor the funding rate for the contract being traded to anticipate potential fee charges.
• Position Size: The larger the position size, the higher the overnight fee. Consider adjusting position size to minimize fee impact.
• Trading Strategy: Incorporate overnight fees into trading strategies, especially when holding positions overnight.

Calculating Overnight Fees

The formula for calculating overnight fees on AscendEX is as follows:

Overnight Fee = Funding Rate * Contract Value / 8

• Funding Rate: The current funding rate for the contract.
• Contract Value: The notional value of the contract being traded.
• 8: The number of hours in a trading day.

Example:

Assuming a funding rate of 0.01% and a contract value of $100,000, the overnight fee would be:

Overnight Fee = 0.0001 * $100,000 / 8 = $1.25

Additional Considerations:

• Overnight fees are charged on a daily basis, regardless of the actual position holding time.
• AscendEX may adjust overnight fees based on market conditions or exchange policies.
• It is important to review the specific contract specifications on AscendEX for detailed information on overnight fee calculations and policies.