How Much Does a Perpetual Contract Cost Daily? Understanding Fees and Calculations

Perpetual contracts have emerged as one of the most popular trading instruments in the cryptocurrency derivatives market. Unlike traditional futures, they do not require physical settlement or expiration, allowing traders to hold positions indefinitely. This flexibility has made them a go-to choice for both retail and institutional investors. But a common question remains: how much does a perpetual contract cost each day? And more importantly, how are the fees calculated?

In this comprehensive guide, we’ll break down the daily costs associated with perpetual contracts, explain how trading and funding fees work, and provide real-world examples to help you understand your potential expenses. Whether you're new to crypto derivatives or looking to refine your strategy, this article will equip you with the knowledge to trade more efficiently.

Understanding Perpetual Contract Costs

The daily cost of holding a perpetual contract primarily comes from two sources:

1. Trading fees (paid when opening or closing positions)
2. Funding fees (periodic payments between long and short traders)

Let’s explore each in detail.

1. Trading Fees: Entry and Exit Costs

Every time you open or close a position, the exchange charges a trading fee. These fees are deducted from your margin balance in the asset you're trading—such as BTC, ETH, or EOS—and are factored into your realized profit and loss.

Trading fees depend on whether you're a maker (placing limit orders that add liquidity) or a taker (executing market orders that remove liquidity).

Standard Fee Structure:

• Maker fee: 0.02%
• Taker fee: 0.04%

Formula:

Trading Fee = (Number of Contracts × Contract Value / Execution Price) × Fee Rate

Example 1: BTC Perpetual Contract

• Open 200 contracts at $5,000/BTC (contract value = $100)
• Market order (taker):
  Opening fee = (200 × 100 / 5000) × 0.04% = 0.0016 BTC
• Later close at $6,000 with a limit order (maker):
  Closing fee = (200 × 100 / 6000) × 0.02% = 0.000667 BTC

Total trading cost: ~0.002267 BTC

👉 Discover low-fee perpetual trading with competitive funding rates.

Example 2: EOS Perpetual Contract

• Open 200 contracts at $2/EOS (contract value = $10)
• Market open: (200 × 10 / 2) × 0.04% = 0.4 EOS
• Limit close at $3: (200 × 10 / 3) × 0.02% ≈ 0.133 EOS

Total trading cost: ~0.533 EOS

These fees are one-time costs per trade and do not recur daily.

2. Funding Fees: The Daily Holding Cost

Unlike traditional futures, perpetual contracts use funding payments to keep the contract price aligned with the underlying spot price. These payments occur at regular intervals—typically every 8 hours—and represent a transfer between long and short position holders.

If the funding rate is positive, longs pay shorts.
If it's negative, shorts pay longs.

Funding Payment Formula:

Funding Payment = Position Nominal Value × Funding Rate

Where:

• Position Nominal Value = Mark Price × Number of Contracts

What Determines the Funding Rate?

The funding rate consists of two components:

1. Interest Rate (fixed or near-zero)
2. Premium Index (reflects price divergence)

For most USDT-margined contracts, the base interest rate is 0.01% per funding interval (equivalent to 0.03% daily). However, some pairs like LINK/USDT, LTC/USDT, and BNB/USDT have a 0% interest rate.

When the perpetual price trades above spot (common in bullish markets), the premium is positive, pushing the funding rate higher—resulting in longs paying more to shorts.

👉 Check real-time funding rates and manage your exposure effectively.

How Is the Funding Rate Calculated?

The exchange calculates the premium index every second to measure the gap between the perpetual contract price and the spot index.

Premium Index Formula:

P = [Max(0, Impact Buy Price - Mark Price) - Max(0, Mark Price - Impact Sell Price)] / Spot Price

• Impact Buy Price: Price at which a $4,000 USDT buy order would execute
• Impact Sell Price: Equivalent for a $4,000 sell order

This mechanism smooths out short-term manipulation and ensures fair pricing.

Final Funding Rate:

F = P + Clamp(0.01% - P, -0.05%, +0.05%)

In practice:

• If the premium index is between -0.04% and +0.06%, the funding rate equals the base rate (e.g., 0.01% per interval).
• Outside this range, adjustments apply to bring prices back in line.

This system ensures that perpetual contracts remain tightly pegged to spot prices without requiring expiration dates.

Key Features of Perpetual Contracts

1. Mark Price and Fair Value

To prevent unfair liquidations during volatility, exchanges use a mark price instead of the last traded price to calculate unrealized P&L and trigger liquidations.

The mark price combines:

• Spot index price from multiple exchanges
• A time-weighted average of recent basis (difference between contract and spot)

This reduces manipulation risk and protects traders from flash crashes or pumps.

2. Auto-Deleveraging Prevention

Platforms use mechanisms like loss sharing or insurance funds to avoid auto-deleveraging events where profitable traders are forced to absorb losses from bankrupt positions.

While some exchanges use auto-deleveraging (ADL), others rely on insurance pools funded by excess profits—making liquidations smoother and more predictable.

3. No Expiry = Strategic Flexibility

One of the biggest advantages of perpetual contracts is no expiration date. Traders can maintain long-term positions without rolling over contracts, eliminating unnecessary rollover costs and execution risks.

This makes perpetuals ideal for hedging, arbitrage, and macro trading strategies.

Frequently Asked Questions (FAQ)

Q: Are funding fees charged every day?
A: Yes, but typically every 8 hours. Over 24 hours, you'll see three funding rounds. The actual cost depends on market conditions and whether you're long or short.

Q: Can I avoid paying funding fees?
A: Yes—by closing your position before the funding timestamp (usually at UTC 0:00, 8:00, 16:00). Alternatively, you can flip your position to receive payments instead of paying them.

Q: Do all perpetual contracts have funding fees?
A: Most do, especially USDT-margined ones. However, some platforms offer "inverse" or coin-margined contracts with different mechanics.

Q: How are trading fees refunded for makers?
A: Maker orders add liquidity, so some exchanges offer rebates or lower fees. This incentivizes tighter spreads and better market depth.

Q: What happens if I hold through a funding interval?
A: If your position is open at the moment of settlement, you’ll either pay or receive the funding fee based on the prevailing rate and your side (long/short).

Q: Is there a maximum funding rate?
A: Yes—most platforms cap it between -0.75% and +0.75% per interval to prevent extreme volatility in financing costs.

👉 Start trading perpetuals with transparent fee structures and real-time data tools.

Final Thoughts

Understanding how much a perpetual contract costs daily goes beyond just checking a fee schedule. It involves knowing how trading fees, funding rates, and mark pricing impact your overall profitability.

While trading fees are small and one-time, funding fees can accumulate, especially in strong trending markets where longs consistently pay shorts (or vice versa). Smart traders monitor these rates and adjust positions accordingly—either by timing exits before funding events or by flipping sides to collect payments.

With proper risk management and an understanding of the fee structure, perpetual contracts offer powerful tools for speculation, hedging, and portfolio diversification in the crypto market.

Core Keywords: perpetual contract, funding fee, trading fee, mark price, contract trading, crypto derivatives, funding rate calculation