Perpetual Contracts

Overview

A perpetual futures contract is an agreement to buy or sell an asset at an unspecified point in the future. Globe's perpetual futures are all settled in USD (US Dollars), and differ from regular futures as they do not have a pre-specified delivery date, therefore they can be held indefinitely. Payments are periodically (every 8 hours) exchanged between holders of the two sides of the contracts, long and short, with the direction and magnitude of the settlement based on the difference between the contract price and that of the underlying asset (as set by the index price). This mechanism is known as funding, and more details on the funding amount can be found below.

Leverage

Globe offers up to 100x leverage on the perpetual contracts. Therefore you do not need to post 100% collateral as margin. All margin is denominated in USD. See leverage.

Contracts

All perpetual contracts offered are linear contracts, and each contract has a size of a fixed amount of the base currency. For example, one contract of BTC-PERP has a size of 0.0001 BTC, and the cost of this contract in USD is calculated using the index price. The price tick size is the minimum increment in price that can be traded.

Funding

Funding occurs every 8 hours, three times a day, always at the following times: 00:00 UTC, 08:00 UTC and 16:00 UTC. You must be holding either a short or a long position at the time of funding to receive a funding payout. When the funding rate is positive, for example +0.01%, longs pay$0.01\mathrm{\%}$of their positions to shorts, who receive $0.01\mathrm{\%}$on their positions at the time of funding. Globe does not charge any fees on funding.

The funding payment received is:

$$\text{funding\_payment} = \text{number\_of\_contracts} \cdot \text{index\_price} \cdot \text{funding\_rate}$$

Funding Rate Calculation

Central to the core of perpetual futures is the funding mechanic which makes the contract price tend to track the mark price of the underlying index price of the contract. It consists of the premium (or discount) rate.

Premium (or Discount) rate

The price of the instrument may be at a significant premium or discount to the underlying mark price. In these situations, the Premium rate will be used to raise or lower the next funding rate. It is calculated as:

$$\text{premium\_rate} = \frac{\text{mark\_price} - \text{index\_price} }{\text{index\_price} }$$

The funding rate is dampened by $0.05 \mathrm{\%}$, defined by the following equation:

$$\text{funding\_rate} = \text{max} ( 0.05 \mathrm{\%} , \text{premium\_rate} ) + \text{min} ( - 0.05 \mathrm{\%} , \text{premium\_rate} )$$

Which means:

• If the premium rate is between $- 0.05 \mathrm{\%}$ to $0.05 \mathrm{\%}$ the funding rate will be set to $0 \mathrm{\%}$
• If the premium rate is greater than $0.05 \mathrm{\%}$ the funding rate will be reduced by $0.05 \mathrm{\%}$
• If the premium rate is less than $- 0.05 \mathrm{\%}$ the funding rate will be increased by $0.05 \mathrm{\%}$

The final funding rate is then computed using a 8$8$ hour time weighted average price over rates.

Index Price

The index price of each perpetual product is calculated from the spot price of the asset on other exchanges, except for exotic perpetuals, such as BTC-VIX.

Exchanges used include Ascendex, Binance, Bitfinex, Bitstamp, Bybit, Coinbase Pro, FTX, Kraken.

Mark Price

The mark price is defined as a 30 second exponential moving average of the fair price, which is the average of the fair impact ask price and fair impact bid price. These are defined as: 

• fair impact ask price is the average execution price of a 10,000 USD market buy order in the current adjusted orderbook.
• fair impact bid price is the average execution price of a 10,000 USD market sell order in the current adjusted orderbook.
• current adjusted book is the current orderbook on globe with $10,000 depth max buy and max sell levels inserted at specific price points. Theses price points vary by product and are listed below.