A perpetual contract is a product which can be traded like a traditional futures contract but never expires.This means you can hold a position for as long as you like. Perpetual Contracts track the underlying Index Price through the use of periodic payments between buyers and sellers of the contract known as Funding.
MEXC provides users with the Inverse Swap and USDT Swap.
Market Mechanisms: The Swap
When trading perpetual swaps, a trader needs to be aware of the following:
- Position Marking: Perpetual swaps adopt fair price marking. The fair price determines unrealized PnL and liquidation prices.
- Initial and maintenance margin: These key margin levels determine how much leverage one can trade with and the point at which liquidation occurs.
- Funding rate: Funding rates are periodic payments exchanged between the traders in the long and short position every 8 hours. If the funding rate is positive, then the longs will pay the shorts. This relationship is reversed if the funding rate is negative.
Note: You will only be entitled to receive or obliged to pay the funding rate if you have an open contract position at specific Funding Timestamps.
Traders can learn the current funding rate for a contract on the “Trade” tab under “Funding Rate”.
Historical Funding Rates are recorded in the Funding Rate History
The Funding Costs is the core operating mechanism of the MEXC Futures
The Funding Timestamps are as follows : 04:00 (UTC), 12:00 (UTC), 20:00 (UTC)
The value of your position is independent of your leverage multiplier. For example: if you hold 100 BTC/USDT contracts, you will receive or pay for funds based on the value of these contracts instead of how much margin you have allocated to this position.
Funding Cost Limits
MEXC caps the funding cost on its perpetual swaps to allow traders to maximise their leverage. This has been done in two ways.
The absolute upper limit of the funding cost is 75% of the (initial margin rate- maintenance margin rate).
For example, if the initial margin rate is 1%, the maintenance margin rate is 0.5%, then the max. funding cost is 75% * (1%-0.5%) = 0.375%.
Funding Rate: Additional Information
MEXC does not take a cut of the funding rate. The funding rate is exchanged directly between traders in the long position and traders in the short position.
The MEXC transaction fees are as follows:
Maker fee Taker fee
Note: If the contract fee is negative, a payment will be made to the trader instead. .
Wallet balance = Deposit amount - Withdrawal amount + Realized PnL
Realized PnL = Total PnL of closed positions - Total fees - Total funding cost
Total Equity = Wallet balance + Unrealized PnL
Position Margin = Funding for position, generally including all the user's positions (cross or isolated) - Please note that the position margin of MEXC Futures only includes the traders’ isolated margin and the initial margin of the cross position, excluding the floating margin under cross positions.
The margin of open orders = all frozen funds of open orders
Available = Wallet balance - Margin of isolated position - Initial margin of cross margin positions - Frozen assets of open orders
Net asset balance = Funds available for asset transfers and the opening of new positions
Unrealized PnL = sum of all floating profits and losses