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Premium Index
A premium index is a measure used by some perpetual futures platforms to help determine how far the perpetual contract is trading above or below its underlying reference price. The exact formula varies between platforms and can be an input into funding rate calculations.
Why it matters to you
Perpetual contracts have no expiry date, so exchanges need mechanisms that encourage their prices to remain reasonably aligned with the underlying market. The premium index helps measure part of that difference and can influence how much funding traders pay or receive.
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