Inventory feeInventory Fee
One key difference between TradFi contracts and expiring contracts is that positions have no time limit. To reflect that, a rolling charge accrues for as long as the position is held — the "inventory fee". This page explains how Mullet calculates it and where to check it.
One key difference between TradFi contracts and expiring contracts is that positions have no time limit. To reflect that, a rolling charge accrues for as long as the position is open — the "inventory fee". This page explains how Mullet calculates it and where to check it.
What the inventory fee is
The inventory fee is the rolling cost of keeping a TradFi contract position open. It's a little like traditional interest — any financial instrument with a borrowing component carries a charge that builds up over time. In the context of TradFi contracts it plays several roles:
- Reflects the financing cost of holding the underlying asset
- Covers the capital the platform ties up while making markets
- Rebalances long and short pressure when the contract price drifts noticeably from the underlying index
It isn't a one-off charge but a rolling cost settled once per holding period, regardless of whether you're up or down.
Settlement cycle
Mullet settles the inventory fee once a day, fixed at 00:00 Beijing time (16:00 UTC). Positions open at that moment are charged based on their notional value and the prevailing rate. There is never more than one settlement per day.
| Settlement (UTC) | Beijing time | New York time |
|---|---|---|
| 16:00 | 00:00 (next day) | 12:00 |
How to avoid it: only positions held at the settlement moment take part. If your holding period never spans 00:00 Beijing time (16:00 UTC), no inventory fee accrues that day — which suits intraday and minute-level strategies.
Triple charge on instruments that don't trade around the clock: forex, precious metals, indices and other instruments without 24/7 sessions are charged 3× the inventory fee on specific trading days to cover weekend financing. The exact days are published on each instrument's detail page.
How it's calculated
Mullet's inventory fee rate has two parts — a base rate reflecting the financing benchmark, and an adjustment reflecting how far the contract has drifted from the underlying. Adding them gives the annualised inventory fee rate for the period, subject to caps.
Base rate
Reflects the interest rate differential between holding the underlying and holding the quote currency (USDC). Crypto instruments are usually fixed at a low level, while forex and commodities are calibrated dynamically against central bank rates and carrying costs.
Spread adjustment
The further the contract price drifts from the underlying index, the larger this term becomes in absolute value — it's the mechanism that "pulls" price back to the underlying. Most of the time it's small, and the base rate dominates the overall figure.
About the direction of the rate: in most conditions the inventory fee is paid one way — usually by the dominant side. But in certain unusual market states (for example extreme volatility where both sides need balancing), Mullet may charge the fee to both sides, in order to keep the system stable. We highlight this in red in the app 30 minutes in advance.
The actual daily charge
The rates shown in the app and in the "rate range" table below are all annualised. Because settlement happens daily, the amount actually deducted from a position each day is the annualised rate pro-rated to one day:
Rate ranges
All figures below are annualised ranges; the actual daily charge is derived with the formula above.
| Asset class | Typical range (annualised) | Extreme cap (annualised) |
|---|---|---|
| Major crypto (BTC/ETH/SOL) | ±0.01% — ±0.05% | ±0.75% |
| Other crypto | ±0.02% — ±0.075% | ±1.00% |
| Forex / precious metals | ±0.01% — ±0.03% | ±0.30% |
| Energy / indices | ±0.02% — ±0.05% | ±0.50% |
| Stocks | ±0.02% — ±0.06% | ±0.60% |
Worked example
Say you hold a SOL/USD long with 10,000 USDC of notional value and the annualised inventory fee rate for the period is 1.5%:
Hold that position for 30 days (30 settlements) and, assuming the annualised rate is unchanged, the total cost is around 12.33 USDC. Long-term holders should build this into the cost side of their strategy.
Checking historical rates
The "inventory fee" module on the right of each instrument's detail page shows:
- A bar chart of the actual rate at each of the last 7 daily settlements
- The average rate and trend over the past 30 days
- Full history — the exact rate at each settlement and what your account paid or received
- A countdown to the next settlement
Risk warning: the inventory fee keeps accruing and, on a small profit or loss, can offset or even exceed your floating gain. Set a maximum holding period for every position rather than tying up margin indefinitely and letting the cost build.