What is Notional Value?

Notional value is the total market value a position controls: contract size × mark price. With 10× leverage, $1,000 of collateral controls $10,000 of notional.

It matters because trading fees and funding payments are charged on notional, not on your margin. A funding rate of 0.01% per 8h on $10,000 notional costs $1 per settlement regardless of how much margin backs it.

When sizing a funding-arbitrage trade, the spread is earned on notional — so the same collateral at higher leverage earns more funding but also sits closer to liquidation.