There is no settlement for perpetual contracts, so FMex will use funding rule to realize the anchoring between the price of perpetual contracts and spot index to make sure the price of perpetual contracts is not deviate too much from spot market.
Currently, funding occurs every 8 hours at 04:00 UTC, 12:00 UTC and 20:00 UTC. You will only pay or receive funding if you hold a position at one of these times. If you close your position prior to the funding exchange then you will not pay or receive funding.
The funding you pay or receive is calculated as:
Funding = Position Value * Funding Rate
Note: we use position value to calculate funding, which is irrespective of leverage or margin. When the funding rate is positive, longs pay shorts. When it is negative, shorts pay longs. And the platform charge no fee within.
Funding Rate Calculations
The Funding Rate is comprised of two main parts: the Interest Rate and the Premium / Discount. This rate aims to keep the traded price of the perpetual contract in line with the underlying reference price.
The calculation of the Premium / Discount:
Premium Index (P) = (Max (0, Impact Bid Price - Mark Price) - Max (0, Mark Price - Impact
Ask Price)) / Spot Index Price + Fair Basis used in Mark Price
The Premium Index is used to reflect the Premium or Discount between Perpetual Contracts and Mark Price
The calculation of the Funding Rate is:
Funding Rate (F) = Premium Index (P) + clamp (Interest Rate (I) - Premium Index (P),
FMex calculates the Premium Index (P) and Interest Rate (I) every minute and then performs a 8-Hour Time-Weighted-Average-Price (TWAP) over the series of minute rates.Therefore, the next Funding Rate is calculated by the last 8-Hour Premium Index and the 8-Hour Interest Rate.