Read on Twitter
1 - $BTC #Bitcoin 
What is funding?
Perpetual swaps are a form of futures contract for Bitcoin.
A futures contract is an agreement between counter-parties to buy or sell an asset at an explicit price and date in the future.
What is funding?
Perpetual swaps are a form of futures contract for Bitcoin.
A futures contract is an agreement between counter-parties to buy or sell an asset at an explicit price and date in the future.
2 - $BTC #Bitcoin
The buyer is obligated to buy the underlying asset a specific price once the contract expires,
and the seller is required to furnish the asset at the time of expiry.
1. Expiry date: There is no delivery date and expiry date in perpetual swap trading.
The buyer is obligated to buy the underlying asset a specific price once the contract expires,
and the seller is required to furnish the asset at the time of expiry.
1. Expiry date: There is no delivery date and expiry date in perpetual swap trading.
3 - $BTC #Bitcoin
2. Funding: As there is no expiry date, a "funding" mechanism is used to anchor the perpetual swap price to spot market price. Funding occurs every 8 hours.
2. Funding: As there is no expiry date, a "funding" mechanism is used to anchor the perpetual swap price to spot market price. Funding occurs every 8 hours.
4 - $BTC #Bitcoin
3. Mark Price provides a reasonable reference price based on spot index price and the moving average of basis. It helps to minimize negative impacts caused by abnormal volatility in the perpetual swap market.
3. Mark Price provides a reasonable reference price based on spot index price and the moving average of basis. It helps to minimize negative impacts caused by abnormal volatility in the perpetual swap market.
5 - $BTC #Bitcoin
Funding = position value * funding rate (The funding rate is determined by the difference between contract price and spot index price).
* When the funding rate is positive, longs pay shorts.
* When it is negative shorts pay longs.
Funding = position value * funding rate (The funding rate is determined by the difference between contract price and spot index price).
* When the funding rate is positive, longs pay shorts.
* When it is negative shorts pay longs.
6 - $BTC #Bitcoin
Perpetual Swap contracts don’t expire & charge funding rate at 3 predetermined times every day.
The funding payment, which is the size of your position plus the funding rate, is elicited every 8 hours at the below times:
Perpetual Swap contracts don’t expire & charge funding rate at 3 predetermined times every day.
The funding payment, which is the size of your position plus the funding rate, is elicited every 8 hours at the below times:
7 - $BTC #Bitcoin
Funding rates based on Central timezone (UTC)
Bitmex:
Funding occurs every 8 hours at:
11:00 PM (UTC-5) 4:00 UTC - Bitcoin 4 hour candle close
7:00 AM (UTC-5) 12:00 UTC - Bitcoin 4 hour candle close
3:00 PM (UTC-5) 20:00 UTC - Bitcoin 4 hour candle close
Funding rates based on Central timezone (UTC)
Bitmex:
Funding occurs every 8 hours at:
11:00 PM (UTC-5) 4:00 UTC - Bitcoin 4 hour candle close
7:00 AM (UTC-5) 12:00 UTC - Bitcoin 4 hour candle close
3:00 PM (UTC-5) 20:00 UTC - Bitcoin 4 hour candle close
8 - $BTC #Bitcoin
Binance Futures
Funding occurs every 8 hours at:
7:00 PM (UTC-5) 00:00 UTC - Bitcoin Daily candle close
3:00 AM (UTC-5) 08:00 UTC - Bitcoin 4 hour candle close
11:00 AM (UTC-5) 16:00 UTC - Bitcoin 4 hour candle close
Binance Futures
Funding occurs every 8 hours at:
7:00 PM (UTC-5) 00:00 UTC - Bitcoin Daily candle close
3:00 AM (UTC-5) 08:00 UTC - Bitcoin 4 hour candle close
11:00 AM (UTC-5) 16:00 UTC - Bitcoin 4 hour candle close
9 - $BTC #Bitcoin
Okex Futures
Funding occurs every 8 hours at:
6:00 PM (UTC-5) 01:00 CET
2:00 AM (UTC-5) 09:00 CET
10:00 AM (UTC-5) 17:00 CET
Okex Futures
Funding occurs every 8 hours at:
6:00 PM (UTC-5) 01:00 CET
2:00 AM (UTC-5) 09:00 CET
10:00 AM (UTC-5) 17:00 CET
10 - $BTC #Bitcoin
How to trade based on Funding?
Negative funding means that traders going against other traders (short vs. long) are rewarded for trading against the trend. If the funding rate is negative, shorts pay longs and vice versa for a positive funding rate.
How to trade based on Funding?
Negative funding means that traders going against other traders (short vs. long) are rewarded for trading against the trend. If the funding rate is negative, shorts pay longs and vice versa for a positive funding rate.
11 - $BTC #Bitcoin
The funding is designed to keep the flow of perpetual contracts that do not expire. Since there’s no expiry with perpetual swaps, it is challenging for the price to converge on the index price.
The funding is designed to keep the flow of perpetual contracts that do not expire. Since there’s no expiry with perpetual swaps, it is challenging for the price to converge on the index price.
12 - $BTC #Bitcoin
The result is that traders are incentivized to open or close certain positions, which focalize the contract price on the index price using interest payments transferred between the long and short traders.
The result is that traders are incentivized to open or close certain positions, which focalize the contract price on the index price using interest payments transferred between the long and short traders.
13 - $BTC #Bitcoin
Funding rates history
Based on March-June, 2020
Neutral positive rates (0.01%)
Neutral negative rates (-0.01%
Positive rates (0.1%)
Negative rates (-0.1%)
Extreme positive (0.3%)
Extreme negative (-0.34%)
Funding rates history
Based on March-June, 2020
Neutral positive rates (0.01%)
Neutral negative rates (-0.01%
Positive rates (0.1%)
Negative rates (-0.1%)
Extreme positive (0.3%)
Extreme negative (-0.34%)
14 - $BTC #Bitcoin
Funding rates strategy
1. Bullish
Price - rising
Open interest - rising
Funding - falling to Extreme negative
Liquidation - Longs get liquidated (big size)
Funding rates strategy
1. Bullish
Price - rising
Open interest - rising
Funding - falling to Extreme negative
Liquidation - Longs get liquidated (big size)
15 - $BTC #Bitcoin
2. Moderately Bearish
Price - falling
Open interest - falling
Funding - Neutral
Liquidation - None
2. Moderately Bearish
Price - falling
Open interest - falling
Funding - Neutral
Liquidation - None
16 - $BTC #Bitcoin
3. Bearish
Price - falling
Open interest - rising
Funding - rising to Extreme positive
Liquidation - Shorts get liquidated (big size)
3. Bearish
Price - falling
Open interest - rising
Funding - rising to Extreme positive
Liquidation - Shorts get liquidated (big size)
17 - $BTC #Bitcoin
2. Moderately Bullish
Price - rising
Open interest - falling
Funding - Neutral
Liquidation - None
2. Moderately Bullish
Price - rising
Open interest - falling
Funding - Neutral
Liquidation - None
18 - $BTC #Bitcoin
Notes: In strong trends, funding can be ignored. Buyers/sellers are paying high price to stay in trend. That can result in violent price swings, long or short squeezes.
Notes: In strong trends, funding can be ignored. Buyers/sellers are paying high price to stay in trend. That can result in violent price swings, long or short squeezes.
19 - $BTC #Bitcoin
Tools used:
https://pro.bybt.com/futures/FundingRates @bybt_com
https://www.binance.com/en/futures/funding-history/3
https://coinalyze.net/bitcoin/usdt/binance/btcusdt_perp/price-chart-live/ @coinalyzetool
https://www.okex.com/markets/futures-data/btc-usd-weekly
https://www.coingecko.com/en/exchanges/derivatives
https://www.tradingview.com/script/exvN2QgD-BitMEX-Funding-and-Premium-Index-NeoButane/
https://trdr.io/console @TRDR_io https://analytics.skew.com/dashboard/bitcoin-futures
Tools used:
https://pro.bybt.com/futures/FundingRates @bybt_com
https://www.binance.com/en/futures/funding-history/3
https://coinalyze.net/bitcoin/usdt/binance/btcusdt_perp/price-chart-live/ @coinalyzetool
https://www.okex.com/markets/futures-data/btc-usd-weekly
https://www.coingecko.com/en/exchanges/derivatives
https://www.tradingview.com/script/exvN2QgD-BitMEX-Funding-and-Premium-Index-NeoButane/
https://trdr.io/console @TRDR_io https://analytics.skew.com/dashboard/bitcoin-futures
