Two rows on a Bitcoin derivatives statement show funding rates of the same size with opposite signs. Their average is zero. Yet the account paid out more than it received. There need be no error in the statement: averaging percentages drops a piece of information the account ledger kept, namely how large the position was when each rate applied.
For a straightforward perpetual contract settled in the quote currency, one way to estimate perpetual funding costsΒ is to run a separate scenario for each settlement rather than put an average rate into one calculation. For the exercise below, assume that a positive rate is a cost to the long position and a negative rate is a credit. Nothing in the example depends on where the price of bitcoin goes next.
Rebuild the two entries
At the first settlement, the hypothetical long position has a value of $20,000. The settled funding rate is positive 0.02 percent. Multiplying $20,000 by 0.0002 gives $4, a debit. By the next settlement the position has been cut in half. The value used for the calculation is now $10,000 and the rate is negative 0.02 percent. The ledger records a $2 credit. Across the two entries, the account is down $2 from funding alone.
Now reverse the position values but leave both rates in the same order. The first entry is a $2 debit and the second a $4 credit. The account receives $2 overall. The arithmetic mean of the two rates was zero in both cases. Even the average position value was identical. What changed was which position value went with which rate. Averaging the two columns independently loses that pairing.
Use the value the contract actually specifies
The deposit is not the number to insert in the position-value column. Two people can hold the same quantity of a linear contract and deposit different amounts of collateral. That difference alone does not give them different funding transfers if the funding rate, position value and eligibility are otherwise the same.
The contract examples published by BybitΒ show why the instrument label also belongs in the worksheet. For the linear example, quantity times mark price gives position value in the settlement currency. Its inverse-contract example uses a different calculation and the transfer is denominated in the underlying asset. A spreadsheet that adds a bitcoin amount to a dollar amount without converting them has a units problem, even when both numbers were copied correctly.
Match a charge to a funding period
An account statement may not display each funding calculation when it happens. The Coinbase description of US perpetual-style futuresΒ distinguishes hourly calculations from the cash adjustments processed in clearing cycles. For that product, an apparently large cash adjustment may call for several hourly records, not one hourly rate multiplied by the end-of-day position.
Start with the venueβs settled observations, the side held, the applicable position values and their denominations. Keep those rows even when the statement reports a single total. Mark an interval with missing data as unknown rather than entering zero: a zero rate says no transfer was due under that rate; a missing rate says the calculation is incomplete.
The final check is deliberately narrow. Add the signed funding amounts and compare the sum with the funding line on the statement. Do not expect that sum to explain every change in the account balance. A trading fee or a loss on the position belongs elsewhere. In the two-row example a reader can account for the missing $2 without explaining a single price move. That is what makes the reconciliation useful.
