Post-Only Orders: Spot & Futures – A Fee-Saving Comparison.
Post-Only Orders: Spot & Futures – A Fee-Saving Comparison
For new traders entering the world of cryptocurrency, understanding trading fees can be just as important as understanding market analysis. Fees eat into profits, and even small differences can accumulate significantly over time. One powerful tool to reduce these fees is the “post-only” order type. This article will break down post-only orders, comparing their functionality and benefits across both spot and futures markets, and specifically examining how they are implemented on popular platforms like Binance and Bybit. We’ll focus on what beginners should prioritize to leverage this fee-saving strategy.
What are Post-Only Orders?
Traditionally, when you place a buy or sell order on an exchange, it’s considered a “maker” order if it adds liquidity to the order book (placing an order that isn’t immediately filled) and a “taker” order if it removes liquidity (filling an order that already exists on the order book). Taker orders generally incur higher fees than maker orders, as exchanges incentivize market makers to provide liquidity.
A post-only order is a specific type of limit order that *guarantees* it will be executed as a maker order. It instructs the exchange to only submit your order if it can be filled without immediately taking liquidity from the existing order book. If your order would be filled as a taker, it is simply cancelled. This is particularly useful in fast-moving markets where your order might inadvertently become a taker order if placed as a standard limit order.
Spot Trading vs. Futures Trading: A Quick Overview
Before diving into the specifics of post-only orders in each market, let's briefly recap the differences between spot and futures trading:
- Spot Trading: Involves the immediate exchange of cryptocurrencies. You buy or sell crypto directly, and ownership is transferred instantly. Profits are made from price appreciation.
- Futures Trading: Involves contracts that obligate you to buy or sell an asset at a predetermined price on a future date. Futures are often leveraged, meaning you can control a larger position with a smaller amount of capital. Profits (and losses) are magnified by this leverage. Understanding effective risk management is crucial in futures trading, as detailed in Crypto Futures Strategies: Maximizing Profits and Minimizing Risks with Effective Risk Management.
Post-Only Orders in Spot Trading
While not universally available on all spot exchanges, post-only orders are becoming increasingly common. The benefit in spot trading is primarily fee reduction. If you consistently trade with post-only orders, you’ll predominantly pay maker fees, which are typically lower.
- Binance: Binance offers a post-only order type within its limit order placement. You can select “Post Only” in the order type dropdown. If the order would execute as a taker, it’s automatically cancelled. Binance's fee structure is tiered based on 30-day trading volume and BNB holdings, further incentivizing fee reduction.
- Bybit: Bybit also provides a post-only option for limit orders. It functions similarly to Binance, ensuring your order only executes as a maker.
- Other Exchanges: Many other exchanges are implementing similar functionality, so always check the specific order type options available on your chosen platform.
Post-Only Orders in Futures Trading
Post-only orders are *extremely* popular in futures trading, especially among algorithmic traders and those employing strategies like grid trading. The higher frequency of trading and the impact of leverage make fee reduction even more critical in this market.
- Binance Futures: Binance Futures has a robust post-only order system. You can select “Post Only” as an order type. Binance Futures also offers different margin modes (Cross Margin and Isolated Margin) and funding rates, which are important considerations alongside fees. The role of exchanges in facilitating futures trading is well-documented; see The Role of Exchanges in Cryptocurrency Futures Trading.
- Bybit Futures: Bybit Futures is particularly known for its competitive fee structure and well-designed post-only order functionality. It allows for precise control over order placement and cancellation. Bybit’s user interface is generally considered beginner-friendly.
- Advanced Features: Some exchanges offer advanced post-only features, such as “hidden post-only” orders, which don’t display your order on the order book until it’s partially filled, potentially reducing front-running.
Fee Comparison: Spot vs. Futures with Post-Only Orders
The actual fee savings depend on the exchange, your trading volume, and whether you hold any exchange-specific tokens (like BNB on Binance). Here’s a general comparison:
| Market | Order Type | Typical Maker Fee | Typical Taker Fee |
|---|---|---|---|
| Standard Limit | 0.10% | 0.10% - 0.15% | Post Only | 0.05% - 0.10% | N/A (Order cancelled if taker) | Standard Limit | -0.025% | 0.075% | Post Only | -0.025% | N/A (Order cancelled if taker) |
- Note:* Fees are subject to change and vary based on individual exchange tiers and promotions. These are examples as of late 2023/early 2024.
As you can see, the potential savings in futures trading are often more significant due to the lower maker fees and higher taker fees. Remember that some exchanges offer *negative* maker fees, meaning they pay you to provide liquidity!
User Interface and Ease of Use: Binance vs. Bybit
Both Binance and Bybit offer relatively straightforward interfaces for placing post-only orders, but there are subtle differences that beginners should be aware of.
- Binance: Binance’s interface can be overwhelming for newcomers due to the sheer number of features and options. The post-only option is located in the order type selection, but it’s not always immediately obvious. The advanced order settings can be complex.
- Bybit: Bybit generally has a cleaner and more intuitive interface, particularly for futures trading. The post-only option is clearly labeled and easy to access. The order placement process is more streamlined.
For beginners, Bybit's interface might be easier to navigate initially. However, Binance offers a wider range of trading pairs and features as you become more experienced.
Best Practices for Using Post-Only Orders
- Understand Liquidity: Post-only orders are most effective when there’s sufficient liquidity in the market. If the order book is thin, your order may take a long time to fill, or not fill at all.
- Set Realistic Prices: Your limit price needs to be within a reasonable range of the current market price for your order to be filled. Don't set your price too far away, or it will simply sit unfilled.
- Be Patient: Post-only orders are not designed for immediate execution. Be prepared to wait for your order to be filled, especially in less active markets.
- Consider Slippage: Slippage occurs when the price of an asset changes between the time you place your order and the time it’s filled. This is more likely to happen in volatile markets.
- Combine with Trading Strategies: Post-only orders are particularly effective when used in conjunction with specific trading strategies, such as grid trading or dollar-cost averaging. For example, understanding how to use position trading strategies can further enhance your results; see How to Trade Futures Using Position Trading Strategies.
- Monitor Your Orders: Regularly check your open orders to ensure they are still active and within your desired price range.
Risks Associated with Post-Only Orders
- Missed Opportunities: Because post-only orders are cancelled if they would be filled as a taker, you might miss out on quick profits if the market moves rapidly in your favor.
- Slow Execution: In low-liquidity markets, your order may take a long time to fill, or may not fill at all.
- Market Volatility: During periods of high volatility, the price can move quickly, potentially causing your order to be filled at a less favorable price than anticipated.
Conclusion
Post-only orders are a valuable tool for reducing trading fees, particularly in futures trading. While they require a bit more patience and understanding of market liquidity, the potential savings can be significant. For beginners, starting with Bybit’s user-friendly interface and gradually exploring Binance’s more advanced features is a good approach. Remember to always prioritize risk management and combine post-only orders with a well-defined trading strategy. By carefully considering these factors, you can leverage post-only orders to improve your trading efficiency and profitability.
Recommended Futures Trading Platforms
| Platform | Futures Features | Register |
|---|---|---|
| Binance Futures | Leverage up to 125x, USDⓈ-M contracts | Register now |
| Bitget Futures | USDT-margined contracts | Open account |
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