Binance moves to exclude disrupted overnight data from stock-futures funding
Binance announced it would exclude affected overnight premium observations from its October 21 US-equity perpetual funding calculation following a connection problem.
The cryptocurrency exchange disclosed intermittent network connectivity problems at an unnamed US overnight alternative trading system from 03:46 to 06:30 UTC on October 21. This disruption affected premium-index data used in funding calculations.
Binance stated that the affected observations would be removed from the 08:00 UTC funding-rate calculation for all TradFi perpetuals with US equities as their underlying assets. The adjustment specifically targets the inputs used to determine payments between opposing traders.
Funding mechanism explained
Under Binance's funding methodology, funding represents periodic transfers between long and short perpetual position holders. When the rate is positive, longs pay shorts; when negative, shorts pay longs. The amount depends on the position's nominal value multiplied by the funding rate.
Binance says it charges no fees on these transfers.
The premium index compares futures order book prices with a reference price index, with Binance averaging these observations over the funding period. Excluding affected observations changes this input set rather than canceling payments themselves.
Broader implications
The timing highlights challenges in offering equity derivatives around the clock. Binance's TradFi perpetuals guide addresses interrupted market schedules, vendor-based reference prices, and session-dependent smoothing. During market closures, order-book-derived inputs are used.
Funding differs from mark/index relationships and stock-token collateral valuation, which concern position and asset valuation rather than transfers between opposing positions. Binance provided no resulting rates, payment amounts, or customer loss figures.
Related
