Perpetual futures are no-expiration futures that are subject to Funding.
Specification
Settlement | Cash |
Expiration | Perpetual |
Pricing Currency | USD |
Margin Currency | USD |
Settlement Currency | USD |
Funding | Hourly |
Funding Interval | 1h |
Max. Funding Rate | 0.3% |
Funding Period | 10h |
Equivalence with Perpetual Options
A perpetual futures contract is functionally equivalent to a perpetual call option with strike price zero (identical payoff function). Funding for perpetual futures work in the exact same way as funding for perpetual options.
Funding
Funding-based derivatives (perpetual futures, perpetual options, power perpetuals) are subject to Funding. Funding is an hourly exchange of money between longs and shorts.
Positive Funding Rate: Longs pay shorts.
Negative Funding Rate: Shorts pay longs.
Funding (Long) = -Funding Rate * Position Size
Funding (Short) = Funding Rate * Position Size
Funding takes place during the first five seconds of each hour. During this time, Everstrike takes a snapshot of all user positions, and debits/credits the margin balance of each user, according to the formula above.
Funding Rate
To calculate the Funding Rate, first calculate the Premium:
Premium = ((Mark Price - Index Price) / Index Price)
Next, calculate the Base Funding Rate:
Base Funding Rate = Max(dampener, Premium) + Min(dampener, Premium)
Where dampener is a pre-defined constant (0.03 for futures and 1.00 for options).
Finally, calculate the Funding Rate:
Funding Rate = Base Funding Rate * (Funding Interval/Funding Period)
Funding Period
The Funding Period on Everstrike is 10 hours.
Funding Interval
The Funding Interval on Everstrike is 1 hour.
Settlement
Perpetual futures are cash-settled. Settlement on Everstrike takes place immediately after closing a position. Once the trader closes a position, the P/L from the position is credited to the trader's cash balance. This happens automatically, within one second of closing the position.
Expiration
Perpetual futures do not expire.
Additional Notes
Trading is disabled during the first ten seconds of each hour.
The hourly Funding Rate is capped at 0.3%.