Whereas quarterly futures expire, perpetual futures have funding payments every hour. Specifically, every hour, we measure the 1 hour TWAP of the perpetual future and the 1 hour TWAP of the underlying index:
Every long position pays position size * (TWAP of future - TWAP of index) / 24
Every sort position receives position size * (TWAP of future - TWAP of index) / 24
This is economically somewhat similar to the future expiring once per day. In particular, if you sell a BTC perpetual future which is trading 0.10% above the underlying index all day, then over the course of the next day you will receive a total funding payment of 0.10%.
FTX Crypto Derivatives Exchange: https://ftexchange.com
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