Funding Fees Mexc

Are you new to trading on MEXC Futures and unsure about funding fees? Don’t worry, we’ve got you covered! In this article, we’ll explain everything you need to know about funding fees on MEXC Futures and how they can affect your profit and loss. So let’s dive in!

Fees

As a trader, your profit and loss depend on various factors. Apart from the trading fees, there are two other elements that can impact your overall gains or losses – the funding fee and the profit and loss from your closing positions.

When you take liquidity by placing a market order (taker), you will pay a fee. This fee is calculated by multiplying the position value with the taker fee rate, which is typically 0.06%. On the other hand, if you provide liquidity by placing a limit order (maker), you will only pay a small fee calculated by multiplying the position value with the maker fee rate, usually 0.02%.

But don’t forget, there’s a way to lower your fees! By joining the MEXC Futures VIP program, you can enjoy discounted fees and save even more on your trades.

Funding Fees

Now, let’s talk about funding fees. Funding fees are charged every 8 hours on MEXC Futures and can have a significant impact on your trading. Whether you earn or spend capital expenses through funding fees depends on the funding rate and the direction of your position (long or short).

The funding fee is calculated by multiplying the funding rate with the position value. If the funding rate is positive and you hold a long position, you will need to pay the funding fee. However, if the funding rate is negative, you can actually earn from the funding fee!

Profit and Loss Calculation

Understanding how your profit and loss is calculated is essential for successful trading. Here’s a breakdown of the calculations for both floating P&L (unrealized P&L) and closing P&L (realized P&L):

Floating P&L (Unrealized P&L)

For USDT-margined Futures:

• Long position = (reasonable price – average open price) * number of positions
• Short position = (average open price – reasonable price) * number of positions

For Coin-margined Futures:

• Long position = (1 / average opening price – 1 / reasonable price) * number of positions
• Short position = (1 / reasonable price – 1 / average open price) * number of positions

Closing P&L (Realized P&L)

For USDT-margined Futures:

• Long position = (Closing price – average opening price) * Number of positions
• Short position = (average opening price – closing price) * number of positions

For Coin-margined Futures:

• Long position = (1 / average opening price – 1 / average closing price) * number of positions
• Short position = (1 / average closing price – 1 / average price of open position) * number of positions

Let’s take an example to better understand this. Suppose you buy a 0.1 BTC long position at a price of 50,000 USDT in BTCUSDT futures as a taker. You use 500 USDT as margin and have a leverage of 10x. The taker fee is 0.06%, maker fee is 0.02%, and the funding rate is -0.025%.

In this scenario, you would need to pay a handling fee of 3 USDT (50000 0.1 0.06%). Additionally, you can earn a funding fee of 1.25 USDT (-50000 * -0.025%).

Now, if you close your 0.1 BTC futures position as a maker sell at a price of 60,000 USDT, the profit and loss of the closing position would be (60,000 – 50,000) 0.1 = 1,000 USDT. Adding up the closing fee of 1.2 USDT (60,000 0.02%), your total realized P&L would be 1,003.05 USDT.

Remember, you can always review your transaction history to see the commission, funding rates, and profit and loss of each order.

Closing Thoughts

Calculating your earnings and learning from historical trading data is crucial for improving your trading skills. With MEXC Futures, you have the tools to analyze your performance and make better-informed decisions. So start exploring the platform, calculate your earnings, and pave your way to successful trading!

Disclaimer: Trading crypto involves significant risk, and you may lose your invested capital. The information provided in this article is for educational purposes only and should not be considered as financial advice. It is important to fully understand the risks involved in trading before making any investment decisions.