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Does Upbit contract have overnight fees?

Upbit Contract, operated by Upbit, charges overnight fees on all open positions, the fee structure varying by contract and time of day.

Nov 09, 2024 at 02:56 pm

Does Upbit Contract Have Overnight Fees?

Overnight fees, also known as rollover fees, are charges incurred by traders who hold positions overnight in futures contracts. These fees compensate exchanges for the risk and cost of providing leverage and maintaining positions overnight.

Understanding Overnight Fees in Futures Trading

Futures contracts are agreements to buy or sell an underlying asset at a predetermined price on a specific future date. When traders enter into futures contracts, they have the option to close their positions before the expiration date or hold them overnight. Overnight positions are subject to overnight fees.

Overnight fees are calculated based on the prevailing interest rate, known as the funding rate. The funding rate is typically positive for perpetual contracts and negative for expiry futures contracts. A positive funding rate indicates that traders who are long (i.e., betting on a price increase) pay a fee to traders who are short (i.e., betting on a price decrease). Conversely, a negative funding rate implies the opposite.

Does Upbit Contract Have Overnight Fees?

Yes, Upbit Contract, a futures trading platform operated by Upbit, charges overnight fees on all open positions. The overnight fee structure varies depending on the contract and the time of day.

Calculating Overnight Fees on Upbit Contract

The overnight fee is calculated using the following formula:

Overnight Fee = (Position Size * Funding Rate * 0.01) / 8

Where:

Position Size: The total notional value of the open position.
Funding Rate: The prevailing funding rate for the specific contract.
0.01: A conversion factor to convert the annualized funding rate to daily.
8: The number of hours in an Upbit trading session.

Steps to Calculate Overnight Fees on Upbit Contract

Determine the Position Size: Calculate the total notional value of your open position by multiplying the contract size by the current market price.
Find the Funding Rate: Check the Upbit Contract platform for the prevailing funding rate for the specific contract you are trading.
Apply the Formula: Substitute the values into the overnight fee formula and calculate the fee.

Example

Suppose you have an open position of 10 contracts in the BTCUSDT perpetual contract on Upbit Contract with a current market price of $20,000. The funding rate is 0.01%.

Position Size = 10 contracts * $20,000 = $200,000
Funding Rate = 0.01%

Overnight Fee = (200,000 0.01% 0.01) / 8
= $0.25

Therefore, the overnight fee for holding your position overnight would be $0.25.

Additional Considerations

Overnight fees are charged at the end of each trading session.
Overnight fees are not charged on weekends or holidays.
Upbit Contract offers a tool to view the estimated overnight fees for your open positions.
Managing overnight fees is an important aspect of futures trading to minimize costs and maximize profits.

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