I saw a question on another Q&A platform, where a user with high leverage conducted a 125x trade and after closing the position, made a profit of 4%, but noticed that their assets were still down 8.5%?

Upon further inspection, it turned out that all the losses were due to transaction fees. Why is that?

Let's take an example using Binance’s trading fees:

Example: Principal of 1000 USDT, limit order trading fee rate is 0.02%, market order trading fee rate is 0.05%.

With 10x leverage, it becomes 10000 USDT,

Limit order: 10000 USDT × 0.02% = 2 USDT fee

Market order: 10000 USDT × 0.05% = 5 USDT fee

Many people may not be aware of the existence of fees, or if they realize they made a profit, why are they still at a loss?

Each exchange has different fee rates, and the fees charged vary as well, depending on the trading model.

If you use 100x leverage with pure limit orders, your position must at least profit by over 4% to make money. Similarly, with pure market orders, your position must profit over 10% for you to earn.

Let me give you an analogy:

With 900 USDT using 100x leverage to buy 1 Bitcoin worth 90000 USDT, the current position value is 90000 USDT.

The fee for a limit order buy is 90000 × 0.02% = 18, requiring manual setup for entry and exit points.

The fee for a market order buy is 90000 × 0.05% = 45, where the system automatically enters the market (the system will enter at the current best price).

The fee for one trade (buy and sell) is 36 or 90.

(This is just an example, do not imitate!!!)

At this point, the advantages of fee rebates become apparent. Through rebates, you can recover a portion of the fees, effectively saving money.

More importantly, fee rebates are applicable not only to spot trading but also to contract trading. This means whether you are a spot trading expert or a contract trading master, you can enjoy more trading returns through rebates.

So it's essential to enable fee rebates; the fees you should reclaim must be reclaimed, otherwise they all go to the market.

When you enable fee rebates, the fees are returned to your own account, saving you at least several hundred in fees each month, which is quite easy.