Binance Crypto Futures Trading Fees: Maker vs. Taker Costs – And How To Minimize Them
Main Takeaways
In crypto futures trading, understanding and managing transaction costs is crucial for optimizing long-term returns.
Maker fees apply when adding liquidity to the order book, while taker fees apply when removing liquidity. Maker fees are generally lower than taker fees.
Accurately calculating fees is essential for effective trading strategies and risk management.
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Futures trading offers users exposure to cryptocurrencies without the need to hold the underlying asset. It involves entering into contracts to buy or sell a specific amount of a cryptocurrency at a predetermined price on a future date. One of the key features of futures trading is the use of leverage, which allows traders to control large positions with relatively small amounts of capital. This can amplify both potential gains and losses, making it a high-risk, high-reward strategy.
In addition to speculation, futures contracts can be used for hedging purposes, helping investors manage risk by protecting against potential price fluctuations in the cryptocurrency market. The presence of futures markets can also enhance market liquidity, attracting a diverse range of participants, including institutional investors.
While crypto futures trading offers significant opportunities, it requires a thorough understanding of the market dynamics and the associated risks. It is also essential to understand the associated costs, including trading fees, to optimize trading strategies and returns.
What Are Crypto Futures Trading Fees?
Trading fees are charges imposed by exchanges for executing transactions. They compensate the platform for facilitating trades and incentivize liquidity provision. These fees occur at every transaction point when traders buy, sell, or convert crypto derivatives.
Maker vs. Taker Fees in Crypto Futures Trading
Traders may encounter two primary types of fees on crypto derivatives exchanges like Binance Futures:
Maker Fees
Paid when traders add liquidity to the order book by placing limit orders below or above the market price.
Generally lower than taker fees, encouraging liquidity provision.
Taker Fees
Incurred when traders remove liquidity from the order book by placing market orders.
Typically higher than maker fees due to the immediate execution of trades.
How Do Trading Fees Impact Profitability?
Trading fees can impact your returns depending on how entry and exit orders are executed. As we will explore below, maker fees are less expensive and, in some cases, can earn an investor a rebate.
Even a small transaction fee, combined with other related expenses such as funding fees, can add up over time. As the trading costs accumulate, a portfolio’s return can be significantly reduced.
For instance, if your portfolio was up 20% for the year, but you paid 2% in fees and other trading expenses, your return would be only 18%, and that difference can add up over time.
Binance Futures Fee Structure
Binance Futures offers a competitive fee structure:
Taker Fee Rates
USDT & Coin-M: Start at 0.045% and can decrease to 0.0153% based on trading volume and BNB holdings.
USDC: Start at 0.036% and can decrease to 0.0122% based on trading volume and BNB holdings.
Maker Fee Rates
USDT & Coin-M: Start at 0.018% and can decrease to 0.0000% under specific conditions.
USDC: Enjoy 0% fee for all USDC-margined perpetual contracts.
For detailed information, refer to Binance's official fee structure.
How to Calculate Binance Futures Trading Fees
Accurately calculating trading fees is crucial for effective trading. Here's how to calculate them.
Fee to Open = (Contract Quantity × Entry Price) × Trading Fee Rate
Fee to Close = (Contract Quantity × Exit Price) × Trading Fee Rate
Example Calculation
Suppose you are about to enter a long position for 1 BTCUSDC contract at $40,000 and close at $40,500, with a taker fee rate of 0.05% and a maker fee rate of 0.02%. Here’s the fees that apply to your trade.
Using the equations above, traders can better determine where they want to open and close trades to avoid higher fee rates.
When both entry and exit orders are executed as maker orders (as in the example), trades will be subject to the lowest fee of 16.1 USDT. When both maker and taker orders are executed, the result is always a lower fee than that of a double taker order. Traders would be subject to a 32.2 USDT fee if both the entry and exit orders were executed as taker orders.
Between all-taker-orders and all-maker-orders is a 16.1 USDT difference. In other words, all-taker-orders execution would double the cost of an all-maker-orders execution.
Traders must aim for maker orders to minimize any losses to fees.
How to Minimize Crypto Futures Trading Costs
If you hold BNB on Binance, you are entitled to an even better offer on futures trading fees: up to 10% discount, and even more for members of our VIP program. Check this table for more details.
Final Thoughts
Understanding and accurately calculating trading fees are essential for effective crypto futures trading. By considering maker and taker fees, along with other potential costs, traders can optimize their strategies and enhance profitability.
Offering some of the lowest taker fees in the market, Binance Futures is a great place to start trading crypto derivatives.
Further Reading
Binance P2P Beginner’s Guide: How to Buy and Sell Crypto Safely
Top Lead Trader Tips: Cryptoxn on Leveraging Trading Algorithms
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