Perpetual contracts have become one of the most popular derivatives in the digital asset trading space, offering traders flexibility, high leverage, and continuous exposure without expiration dates. However, understanding the cost structure—especially the daily fees—is crucial for any trader aiming to maximize profitability and manage risk effectively. This article dives into how perpetual contract fees are calculated, what components make up these costs, and how much you can expect to pay daily depending on your position size and chosen exchange.
What Are Perpetual Contracts?
Perpetual contracts are derivative financial instruments that allow traders to speculate on the price movement of assets—such as Bitcoin or Ethereum—without owning the underlying asset. Unlike traditional futures contracts, perpetuals do not have an expiration date, meaning positions can be held indefinitely.
To maintain price alignment with the spot market, perpetual contracts use a mechanism called funding rates, which results in periodic payments between long and short position holders. This system replaces the need for expiration and settlement.
👉 Discover how funding rates impact your daily trading costs and learn strategies to minimize them.
Components of Perpetual Contract Fees
Trading perpetual contracts involves several types of fees, each serving a different purpose. The primary components include:
1. Opening (Trading) Fee
Every time you open a new position—whether long or short—the exchange charges an opening fee, also known as the taker or maker fee depending on your order type.
- Taker Fee: Applied when you place an order that immediately matches with an existing order (market orders).
- Maker Fee: Charged when you place a limit order that adds liquidity to the order book.
These fees are typically a small percentage of the trade value, ranging from 0.01% to 0.075% across major platforms. For example:
- Trade size: $10,000
- Taker fee rate: 0.05%
- Opening fee: $10,000 × 0.05% = **$5**
Some exchanges offer lower maker fees—or even rebates—to incentivize market-making activity.
2. Funding Rate (Daily Holding Cost)
Since perpetual contracts don’t expire, exchanges use funding rates to keep contract prices tied to the underlying spot price. These rates are exchanged between long and short traders every 8 hours (commonly at 00:00, 08:00, and 16:00 UTC).
How Is Funding Calculated?
The formula is simple:
Funding Payment = Position Value × Funding Rate
For instance:
- Position value: $5,000
- Funding rate: 0.01% per period
- Payment every 8 hours: $5,000 × 0.01% = **$0.50**
- Daily cost (3 payments): $1.50
Important Notes:
- If funding is positive, longs pay shorts.
- If funding is negative, shorts pay longs.
- You only pay or receive funding if you hold a position at the settlement time.
This means you can avoid funding costs by closing your position before the next funding timestamp.
3. Liquidity Provider Incentives
Some exchanges reward users who place limit orders that get filled later (makers) with a negative fee or rebate. This encourages order book depth and tighter spreads.
For example:
- Maker rebate: -0.01%
- Trade size: $10,000
- You earn: $1 (credited to your account)
Conversely, takers usually pay slightly more to remove liquidity.
Real-World Examples: How Different Exchanges Handle Fees
While core principles remain consistent, fee structures vary across platforms. Below is a comparison based on typical models used by leading exchanges.
Exchange A
- Opening fee (taker): 0.05%
- Maker fee: 0.02%
- Funding interval: Every 8 hours
- Average daily funding rate: ~0.03%
- Settlement time: UTC 00:00, 08:00, 16:00
A $10,000 position would incur approximately:
- Opening cost: $5
- Daily funding: ~$3 (if rate averages 0.01% per cycle)
Exchange B
- Opening fee (taker): 0.075%
- Maker rebate: -0.025%
- Funding mechanism: Dynamic based on premium index
- Settlement time: Beijing Time 08:00, 16:00, 24:00 (~UTC+8)
Higher taker fees but aggressive maker incentives benefit algorithmic traders.
Exchange C
- Tiered fees based on volume and holdings
- Taker fee range: 0.05% – 0.2%
- Funding rate cap: Max 0.3% per cycle
- Settlement: Local midnight
High-volume traders may qualify for reduced rates through VIP programs.
How to Estimate Your Daily Holding Costs
To project how much you’ll pay (or earn) daily in funding fees, follow this step-by-step process:
Step 1: Determine Your Position Value
Calculate the total dollar amount of your open position.
Example: 1 BTC at $60,000 = $60,000 position
Step 2: Check Current Funding Rate
Most exchanges display upcoming funding rates in real time. Use this data to estimate average daily cost.
Example: Average rate = 0.01% per 8-hour period
Daily rate ≈ 3 × 0.01% = 0.03%
Step 3: Calculate Daily Funding Cost
$60,000 × 0.03% = **$18 per day**
You can reduce this cost by:
- Trading during low-funding periods
- Using limit orders to become a maker
- Closing positions before funding timestamps
Frequently Asked Questions (FAQ)
Q1: Do I pay funding fees every day even if I don’t trade?
No—you only pay or receive funding if you hold an open position at the moment of funding settlement (typically every 8 hours). If your position is closed before then, no fee applies.
Q2: Can I earn money from funding rates?
Yes! When the funding rate is negative, short position holders receive payments from longs. Strategic traders sometimes take short positions during periods of extreme bullish sentiment to collect regular funding income.
Q3: Are opening fees charged when I close a position?
Yes, closing a position incurs the same taker or maker fee as opening it, depending on your order type.
Q4: Why do funding rates change so frequently?
Funding rates adjust automatically based on market demand. When many traders go long, rates rise to incentivize shorts and balance the market.
Q5: Is there a way to avoid paying high funding fees?
Absolutely:
- Use limit orders to avoid taker fees
- Monitor funding trends and avoid holding during spikes
- Trade on exchanges with lower average funding rates
Q6: Does leverage affect funding costs?
Leverage doesn’t directly change funding calculations—it's based on position value, not collateral. However, higher leverage increases liquidation risk, especially during volatile funding shifts.
Choosing the Right Exchange for Perpetual Trading
Beyond fees, consider these key factors when selecting a platform:
✅ Exchange Reputation & Security
Opt for globally recognized platforms with strong security records, cold storage practices, and transparent auditing.
✅ Trading Depth & Liquidity
High liquidity ensures tight spreads and faster execution—critical for leveraged trading.
✅ User Experience & Tools
Look for advanced charting tools, risk management features (like stop-loss and take-profit), and mobile accessibility.
✅ Fee Transparency
Choose exchanges that clearly publish their fee schedules, funding history, and settlement times.
👉 Start trading perpetual contracts with low-latency execution and competitive fee structures today.
Final Thoughts
Understanding perpetual contract fees—especially the daily funding cost—is essential for sustainable trading success. While opening fees are relatively predictable, funding rates can fluctuate significantly based on market conditions.
Smart traders monitor these dynamics closely, using timing and order types to minimize costs and sometimes even profit from funding payouts. By choosing a reliable exchange and optimizing your trading behavior around fee cycles, you can enhance returns and maintain control over your trading expenses.
Whether you're a beginner or experienced trader, mastering the economics of perpetual contracts empowers you to make informed decisions in fast-moving crypto markets.