Every trade you make costs something, even when the price does not move. Most of that cost comes from three places: the exchange's trading fee, the spread and, if you trade perpetual contracts, funding. This article puts the three side by side so you can see what one trade really costs you.
A note before the numbers. Exchanges change their fee schedules, and the rate you pay often depends on your account tier, your trading volume and sometimes the asset. We have not quoted any exchange's current rates here, because a rate printed in a blog post goes out of date. The examples below use made-up round numbers so the arithmetic is easy to follow. They are not any exchange's rates.
Maker and taker fees
Most exchanges charge two different rates.
- A maker order adds to the order book. It is a limit order that waits, for example a buy placed below the current price.
- A taker order removes from the order book. It fills straight away against an order that was already waiting, like a market order.
Taker rates are usually higher than maker rates. Makers give the exchange orders to match against. Takers use them up.
Say your exchange charged a made-up 0.10% for makers and 0.20% for takers. You buy $1,000 CAD with a market order, so you pay the taker fee: $2. Later you sell $1,000 with a limit order that waits to fill, so you pay the maker fee: $1. Ignoring any price change, the round trip cost $3, or 0.3% of the trade. If you had used market orders both ways, it would have been $4.
That is the first thing fees do. They set a hurdle. The price has to move in your favour by at least that much before the trade breaks even.
The spread
The spread does not appear on any fee schedule, but you pay it all the same. It is the gap between the best price someone will pay (the bid) and the best price someone will sell at (the ask).
Say the bid is $99.90 and the ask is $100.10. The middle is $100. When you buy with a market order, you pay the ask, $100.10. That is 0.1% above the middle, so on a $1,000 buy the spread costs you about $1. If you bought and sold at once, you would lose the whole $0.20 gap on every unit, before any fee.
Spreads are not fixed. They tend to widen when a market is quiet, on smaller coins with fewer orders, and when news moves prices fast. A large order can also fill at several price levels, which pushes the cost up further.
Funding on perpetual contracts
Funding applies only to perpetual futures, contracts with no end date. If you only buy and sell coins on the spot market, you do not pay it.
At set times, traders on one side of the market pay traders on the other. When the funding rate is positive, longs pay shorts. When it is negative, shorts pay longs. The payment is based on the full size of your position, not the margin you put up, so leverage makes it larger.
With a made-up rate of 0.01% on a $1,000 position, you would pay $0.10 each time funding is charged. That looks small. Held for days, with funding charged several times a day, it adds up. Your exchange publishes how often it charges funding and shows the current rate.
Putting it together
| Cost | When it applies | Made-up example |
|---|---|---|
| Taker fee on the buy | Market order | $2.00 |
| Spread on the buy | Crossing at market price | about $1.00 |
| Maker fee on the sell | Limit order that waits | $1.00 |
| Funding | Perpetual contracts only | $0.00 |
| Total | about $4.00 |
About 0.4% gone before the price has done anything. Fees are certain. Gains are not. Crypto trading carries real risk, and costs make that risk a little larger on every trade.
What to write down from your own schedule
- The date you read it.
- Your current account tier.
- Your maker rate and your taker rate.
- Any discounts and what they depend on.
- If you trade perpetual contracts, how often funding is charged.
Where Atheron Trading fits
Atheron Trading places trades in your own exchange account, through an API key that can trade but never withdraw. That means the trading fees are charged by your exchange, under your account's own schedule. We never hold your money.
Your rules, such as your budget, stop-loss and coin list, are checked before every trade, and every trade is explained, so you can see what was done and why. Until launch, the bot trades with paper money only, at real prices. When you look at those results, keep this article's numbers in mind and ask what your own exchange's fees and spreads would have taken.
