> For the complete documentation index, see [llms.txt](https://references.everstrike.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://references.everstrike.io/trading/funding.md). # Funding Funding is an hourly exchange of payments between traders that hold long positions, and traders that hold short positions.\ \ The purpose of this payment exchange is to keep the Everstrike Mark Price aligned with the Everstrike Index Price.\ \ By forcing longs to pay money to shorts, whenever the Mark Price is **above** the Everstrike Index Price, the Mark Price will gradually move towards the Everstrike Index Price. This happens because the payment disincentivizes being long. By likewise forcing shorts to pay money to longs, whenever the Mark Price is **below** the Everstrike Index Price, the same will happen once again. The Mark Price will move towards the Everstrike Index Price. ### **The Funding Rate** The Funding Rate determines the amount that is transferred between longs and shorts every hour.\ \ It is calculated as the relative difference between the Index Price and the Mark Price. This difference is also known as the Premium.\ \ The Premium is calculated as follows:\ \ `Premium = ((Mark Price - Index Price) / Index Price)`\ \ Once the premium is obtained, the Base Funding Rate can be calculated by taking the Premium, and applying a dampener:\ \ `Base Funding Rate = Max(dampener, Premium) + Min(dampener, Premium)`\ \ The dampener can vary by trading pair. For futures, it is currently set to 0.03 (3%). For options, it is set to 1.00 (100%). These values are subject to change. \ \ The dampener ensures that the Base Funding Rate can only ever be within an interval of\ \ `[-dampener,+dampener]`\ \ To calculate the funding on a Bitcoin options position, one must first scale the Base Funding Rate, to reflect only the interval, for which funding takes place:\ \ `Funding Rate = Base Funding Rate * (Funding Interval/Funding Period)`\ \ where the Funding Period is 10 hours, and the Funding Interval is 1 hour. \ \ Then simply multiply the Funding Rate with the size of the position to get the amount of funding to exchange:\ \ `Funding Payment = Funding Rate * Position Size (USD)` --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://references.everstrike.io/trading/funding.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.