The contract is a high-leverage and high-risk product, thus, the exchange needs a perfect risk control system to protect the interests of users as much as possible. "Capital cost" is an effective system in BW risk control system to anchor the spot price of the perpetual contract price.
- What is the capital cost?
Capital cost is an important mechanism to anchor spot prices in the perpetual contract.
Capital cost is generated every 8 hours at three time points: 00:00 (UTC+8), 08:00 (UTC+8), and 16:00 (UTC+8).
Capital cost is generated every 8 hours at three time points: 00:00 (UTC+8), 08:00 (UTC+8), and 16:00 (UTC+8).
Only if you hold a position at these three points you will be charged to pay the capital cost. If you close your position before these three points, you do not need to pay the capital costs.
The capital cost you are charged or pay is calculated as follows: capital cost = nominal value of the position * capital cost rate.
The nominal value of your position has nothing to do with leverage. For example, if you hold 100 pieces of BTC_USDT contracts, you will be charged to pay according to the nominal value of these contracts, not based on how much margin you have allocated to the position.
When the capital rate is positive, long positions pay to short positions. When the capital rate is negative, short positions pay to long positions.
BW does not charge any capital costs; capital costs are charged among and by users.
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