All lessons
Funding, basis and mark price
Three prices and payments can appear around one position. Separate the traded price, the reference price and the funding cash flow.
Separate trading price, reference price and periodic cash transfers.
The last price is a recent transaction price. An index combines selected reference markets under specified rules. A mark price is a venue-defined valuation used for functions such as unrealized P&L or liquidation. Their formulas and uses must be checked for the exact product.
Basis is a difference between a derivative price and a chosen spot reference. Positive basis does not by itself predict an imminent decline or create a risk-free trade. Differences in settlement, collateral and access can make apparently simple comparisons misleading.
Funding is a periodic transfer or charge defined by perpetual-contract rules. Its sign, interval and calculation vary. Receiving funding is not guaranteed income: the position can lose more through price movement, fees or liquidation than it receives in funding.
Let’s use numbers · hypothetical example
Hypothetical: contract notional is 1,000 and a funding rate is 0.01% for one interval. The simple transfer is 0.10 quote units. A 1% adverse price move changes linear P&L by about 10, far more than that transfer, before costs.
Keep in mind
A trigger based on mark price can activate while the last-trade chart appears different.
Your turn
Label last, index and mark on a fictional product sheet and write which controls each function.
A quick check before we move on
Does receiving funding guarantee a profitable position?
- Yes
- Only at high leverage
- No
Check answer
No Funding is one component of total P&L and does not offset all price risk.
Sources and further reading
Content reviewed: 29 October 2026
Educational material with hypothetical examples. Trading can cause substantial losses. A course, pattern, stop order or past result cannot guarantee a profit or limit every loss. Practise in simulation and check current rules and product terms in your jurisdiction.