CoinEx | Transaction Fee vs Funding Fee in Futures Trading

Transaction Fee

When trading futures, both Makers and Takers will have to pay a Transaction Fee. In particular, the Maker Fee might differ from the Taker Fee, and different exchanges have different rules about the rate for Makers and Takers.

Source: CoinEx

Funding Fee

In a market of crypto contracts, apart from futures, there are also delivery contracts, which are settled monthly/quarterly. Such regular settlements make sure that the market price of delivery contracts stays the same as the spot price. Futures, on the other hand, do not have a settlement date, which means that traders may hold onto them indefinitely. As such, if there is no price correction mechanism, the price gap between spot and futures will become increasingly larger. To bring the futures price back to the level of the spot price, a correction mechanism is needed to minimize the price gap, which triggered the invention of the Funding Fee.

Conclusion

  1. In addition to the PNL of their position, futures traders must also pay Transaction Fee and Funding Fee;
  2. Though the Transaction Fee must be paid, traders may reduce the trading cost by avoiding frequent trades or becoming VIP users;
  3. When the Funding Rate is positive, the Funding Fee is paid by long traders to short traders; when the Funding Rate is negative, the Funding Fee is paid by short traders to long traders;
  4. CoinEx does not charge any Funding Fee. Instead, the fee is paid by/to traders. On CoinEx, the Funding Fee is settled every 8 hours.

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