Two interpretations with different implications:
a) you're paid to go long so lots of people will buy
b) the equilibrium is implying people _need_ to get paid to go long, so they must think things are going down
Conversation
I don’t think that’s right. “I need to get paid to go long” feels like a weird thought given the Oracle will be higher than spot.
Also if you’re on the fence and there’s a pay increase on a long position, how is that not bullish?
1
Replying to
Negative funding --> shorts paying to longs --> futures are trading _below_ spot, not above it
2
Bitmex Oracle price >> last traded bitmex price. I’d actually call last traded bitmex price spot.
1
So if I see I’m getting a cheaper price than “the fair price” it’s hard for me to imagine anyone would think “I have to be paid to be long.”
1
Replying to
If enough people buy, the premium will go up and funding rates will flip to positive.
The fact that rates remain negative means that as soon as premium would get up to 0, there must be more sellers than buyers to drive the premium back negative.
Not necessarily! If everyone and their mother came in to buy, but Oracle price remained elevated relative to last traded mex, negative funding should grow.
1
Replying to
If by oracle price you mean the futures price BitMEX uses to compare to the index: it's generally relatively close to the futures price, and so in general if the premium is very positive the funding will be positive too.
1
Show replies