How to calculate the contract handling fee? Lao Liec teaches you step by step, and all you save is real money!
Don’t be fooled by handling fees anymore! This article uses vernacular to break down the calculation of contract handling fees, from opening to closing positions, and teaches you how to use invitation codes to lock in permanent discounts, so that what you save is what you earn.
How to calculate contract transaction fees? Calculation methods that ordinary people can understand
What are you most afraid of when doing contract trading? It's not that I made a wrong judgment on the market, but that I paid a bunch of handling fees in a confused manner, and in the end I found that all the profits were eaten up by the fees. Today we will use the most straightforward words to explain the contract handling fees clearly - from opening to closing, you can understand how each fee is generated and calculated.
For a full contract transaction, what do you have to pay?
For a complete contract transaction (from opening to closing), the common fees are as follows:
- Handling fee when opening a position
- Handling fee when closing a position
- Funding fee for perpetual contract (charged by each other between buyers and sellers)
- If it is liquidated, there will also be a ** liquidation fee ** (calculated based on the taker rate)
- If the position is liquidated, the maintenance margin will be gone too.
These calculation methods are applicable whether you trade manually or use contract grid or contract martingale strategy.
How is the handling fee calculated? Two formulas to get it done
Assuming that your handling fee level is lv1, then the taker rate is 0.05% and the place order rate is 0.02%.
USDT contract algorithm
Opening fee = face value × number of positions opened × opening price × handling fee rate
The closing fee is to replace the "number of positions opened" and "opening price" with "number of positions closed" and "closing price".
For example: You opened a BTCUSDT perpetual contract with a face value of 0.01 BTC, 100 contracts were opened, the price was 10,000 USDT, the handling fee level was lv1, and the taker order was completed. Opening fee = 0.01 × 100 × 10,000 × 0.0005 = 5 USDT
Algorithm of coin-based contract
Opening fee = face value × number of positions opened ÷ opening price × handling fee rate
The closing fee is also converted into the number and price of the closing position.
For example: You open a BTCUSD perpetual contract with a face value of 100 USD, 100 contracts opened, the price is 10,000, the handling fee level is lv1, and the taker order is completed. Opening fee = 100 × 100 ÷ 10,000 × 0.0005 = 0.0005 BTC
Are the handling rates for different currencies the same?
Taking perpetual contracts as an example, the handling fee rates for mainstream currencies such as BTC, ETH, LTC, BCH, BSV, ETC, EOS, TRX, and XRP are unified:
- Maker: 0.02%
- Taker: 0.05%
For specific rate classifications and discounts, please refer to the exchange’s rate details page.
Several concepts that are easily confused
What are placing orders and taking orders?
- Pending order: The price of your order will not be executed immediately, but will be placed on the market waiting for others to complete the transaction. For example, if the current selling price is 1,000 USD, and you place a buy order of 999 USD, the order will enter the deep list and wait until someone is willing to sell it to you for 999 USD. This is a pending order, and the handling fee is low.
- Taker: After you place the order, it is immediately completed with the existing order in the market, which weakens the depth of the market - this is a taker, and the handling fee is higher.
Pending orders provide liquidity, while taker orders consume liquidity, so the handling fee for pending orders is usually lower than that of taker orders.
How much does it cost to close a position?
The liquidation fee is charged according to the taker rate (Taker) of your current level. This is why the loss of liquidation will be greater than you think - not only the deposit is gone, but also the handling fee will be deducted.
How to calculate the 30-day trading volume?
The platform will first convert the trading volume of all your contract transactions in the currency (BTC, ETH, ETC, etc.) in the past 30 days into BTC, and then convert it into USD based on the daily mid-price of BTC/USD.
Calculation formula: BTC/USD middle price = (opening price + closing price) ÷ 2
It is settled once a day at 0:00 UTC time. The cumulative transaction volume in the previous 30 days is calculated and then your fee level is determined.
Does it cost money to cancel an order?
don't want. Cancellation of unfilled orders is free of charge.
Conclusion: If you save, you will earn, and reduce handling fees from the source.
The handling fees for contract transactions may seem complicated, but they are actually just a few fixed formulas. Understand the difference between placing orders and taking orders, and calculate how much you have to pay each time you open and close a position, so that you will not be deducted in a confusing manner.
**But the most fundamental way to save money is to start from the moment you register! ** If you frequently do contract transactions, the high-frequency handling fees will accumulate to a considerable amount.
**Old leeks all know that if you register with the right invitation code, you can directly get the highest permanent handling fee discount on the platform. ** This is much more practical than using your trading volume to upgrade your VIP later.
👉 How to get permanent fee reduction?
We strongly recommend that you register for mainstream exchanges through formal channels and use the exclusive invitation code with the highest authority. This will not only ensure the security of the account and avoid the risk of the pheasant platform running away, but also lock in the lowest rate from the beginning.
Take the world's top contract exchange Bybit as an example. Register through our exclusive link and enter the invitation code ODXBWMN, and you can permanently enjoy up to 20% of the handling fee reduction.
Register Bybit now and start low-rate trading: https://www.bybitglobal.com/invite?ref=ODXBWMN
The transaction itself is not easy, so don’t spend any extra cost you can save. Choosing a reliable and regular exchange and using the right invitation code is your first step towards successful trading.