Let’s imagine the following situation: Bitcoin‘s price is recovering after a recent crash. As a novice in BTCUSD contract trading, Ann wants to tap into the market now. Before placing a buy order, Ann asks how much trading fees she will pay for this trade.
On Bybit, trading fees are conditioned by two different execution types – Maker and Taker. Ann may pay trading feeS as a taker or earn trading fees as a maker. Let’s take a look at how the trading fee is determined.
What is a Maker?
When the current market price is worse than the trader’s target price, he/she presets the quantity and order price and place the order into the order book. The order waits in the order book to be matched, and thus increases the market depth. This is known as a maker, which provides liquidity for other traders.
When a maker‘s trade is successfully executed, Bybit will not charge any trading fee. Instead, a 0.025% fee rebate (also known as maker fee) will be rewarded, regardless of the order size.
For example, the best sell price is $9,018.5. Ann intends to buy 1,000 contracts at a limit price of $9,017. As her order price is lower than the best sell price, the order can’t be executed immediately and thus will be included in order book. As a result, this adds a depth of 1,000 contracts to the order book.
What is a Taker?
A taker occurs when an order gets executed instantly against an existing order in the order book, and thus decreases the market depth.
Bybit charges a 0.075% trading fee from the taker for consuming liquidity.
For example, Ann places a market order to buy 1,000 contracts, which will be executed instantly with an existing sell order at $9018.5. After the match, 164,639 sell order at $9018.5 will be reduced to 163,639, which means that the depth of 1,000 contracts will be consumed.
If you would like to find out how to calculate the trading fees in details, please visit the Trading fee calculation page from Bybit official guide.
Is a fee rebate guaranteed from limit orders? Not necessarily. A maker trade or taker trade is not determined by order type, but rather how it’s executed. Limit orders can be executed as taker trades, and still be charged taker fees.
For example, the last traded price is $9,050. Ann places a limit order to buy 1,000 BTCUSD contracts at $9,040. The price fluctuates drastically, which leads the best sell price to fall to $9,038. So, once Ann’s order is placed, it will be executed as a taker instantly.
What can Ann do if she wants to ensure that her order can be executed as a maker and earn a maker rebate?
Ann should select the “Post-Only” option when placing an order. A post-only order ensures that an order doesn’t get filled with any existing order, otherwise it will be cancelled by the system automatically. While “Post-Only” ensures that Ann won’t pay any taker fees, she may miss out trading opportunities if her orders get cancelled.