How does BitMEX funding system work?

3 answers

• Shaan-MohammadFeb 27, 2023 · 3 years ago
  Sure! The funding system on BitMEX is designed to maintain the price of perpetual contracts close to the underlying spot market. Every 8 hours, a funding rate is calculated based on the difference between the contract price and the spot price. If the contract price is higher than the spot price, long positions pay funding to short positions, and vice versa. This funding is exchanged between traders and is not taken by BitMEX. The funding rate is dynamic and can vary depending on market conditions. It's an important mechanism that helps prevent large deviations between the contract price and the spot price, ensuring fair trading on the platform.
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• emilysxsharpd2Feb 26, 2024 · 2 years ago
  The BitMEX funding system is an interesting concept. It essentially incentivizes traders to keep the contract price in line with the spot price. If the contract price deviates from the spot price, traders are either rewarded or penalized through the funding mechanism. This helps to prevent market manipulation and encourages fair trading. It's a unique feature of BitMEX that sets it apart from other exchanges.
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• Sicu Bogdan AndreiSep 24, 2024 · a year ago
  As an expert in the field, I can tell you that the BitMEX funding system is quite effective. It helps to maintain stability in the market by aligning the contract price with the spot price. This is particularly important for traders who rely on accurate pricing information. The funding mechanism ensures that the price of perpetual contracts on BitMEX closely tracks the underlying spot market, providing a fair and transparent trading environment.
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