Originally posted on 01/05/2021 @ 00:31
BitMEX continues to be among the most advanced trading platforms for peer-to-peer exchange of crypto-products. The platform hosts a wide range of transactions that are worth billions of dollars on a daily basis. But the most successful traders and participants all have one thing in common – a clear grasp of BitMEX fees.
Why it’s important to understand BitMEX trading fees
You may be a veteran trader in crypto assets or someone who only recently stumbled upon the industry. Regardless of your experience and expertise, a clear understanding of BitMEX trading fees will enhance your experience on this trading platform. That means walking away with much more returns with nominal investments.
However, getting a full understanding of the fee mechanism can be challenging. The platform provides a host of information on BitMEX fees. But they don’t do a great job of breaking down how it works and what it entails.
Here, we provide you with a full rundown of all the elements that go into BitMEX trading fees. This guide will cover everything from BitMEX fee schedule and BitMEX funding fees to BitMEX leverage fees and BitMEX futures fees.
If you’re still new to this, we advise you to skim through our comprehensive overview of the BitMEX platform first and then come back to this specific article. However, if you’re already familiar with crypto trading fees and systems, read on!
Does BitMEX have fees?
Yes, there are specific payments you have to make as you trade on BitMEX.
As with any trading platform, BitMEX comes with its own share of crypto trading fees. However, it’s also unique in the sense that there are no fees for deposits or withdrawals.
There are certain trading fees you have to pay. But most of them are nominal and don’t cost you a whole lot. There are BitMEX maker taker fees, BitMEX margin fees, BitMEX leverage fees, etc. (we explain all of them below).
However, like any other crypto-trading platform, there are fees, risks, and assumptions that go into every move. So, understanding these fees will allow you to make wise and practical choices as you continue trading on this platform.
How much are BitMEX fees?
BitMEX enjoys the distinction of having some of the lowest fees and commissions compared to other crypto exchanges. However, even the low fees can accumulate enough to negate whatever potential profits you stand to gain.
While many participants use the BitMEX maker and taker fees to turn orders to their advantage, it’s not a simple as it sounds. So, understanding these fees and commissions will allow you to take greater advantage of the way finances work on BitMEX.
BitMEX fees come in a variety of categories depending on the type and nature of trading you choose. For the sake of convenience, let’s look at the fees based on the categories.
BitMEX Perpetual Contract Fees
For the uninitiated, perpetual contracts are, essentially, future contracts, but without the expiry date, you’ll find in the latter. So, participants get to hold a perpetual contract position for as long as they wish.
Here, makers get to ‘earn’ a fee (rebate) whenever their orders find a taker. On the other hand, takers have to ‘pay’ a fee for getting access to a position they desire.
The fees under this category deserve a closer look because perpetual contracts are something almost unique to BitMEX.
BitMEX Maker fees
Maker fee is the charge that you pay/receive when you start an order that does not meet the details of any of the existing offers. On BitMEX, you get a rebate/concession for creating such orders that add more liquidity to the market.
BitMEX sets a uniform rate of maker and taker fees for its perpetual contracts. But for the makers, the platform has a negative fee of -0.0250%. So, if you’re a maker, you stand to gain 0.0250% on every order that gets accepted. And this rate is the same across all items regardless of the currency.
For instance, let’s imagine that you make an order that’s the equivalent of $100,000. And this order meets the requirement of an existing order, which gets you a taker. Here, the negative fee of 0.0250% means that you’ll pocket an amount equal to $25 in return for injecting liquidity into the market. The percentage isn’t a lot, but it beats paying fees or making no earnings.
As you can see from the image below, BitMEX creates a constant rate for maker fees for each item/currency on the list. The maker fees are highlighted with green.
If you noticed, the data is not just on the maker and taker fees. There’s information on the leverage, funding fees (long and short), and the Funding Interval.
You’ll also find the leverage you can access on every primary currency available today. No doubt, Bitcoin (XBT) stands out from the rest thanks to its 100x leverage that is simply unbeatable. Of course, there are arguments that suggest that a 100x leverage is, for all practical purposes, too good to be true. However, we’ll explain that aspect in another article.
BitMEX Taker fees
You become a taker when you create a specific order that gets matched with the details of an existing order. Here, you pay a taker fee because you’re taking liquidity from the concerned market.
While makers earn a fee/rebate on their orders, takers will have to pay a fee. Here too, BitMEX maintains a uniform rate of 0.0750% as payment for takers. The same picture above highlights the taker fees for perpetual contracts in red.
As you can see, the percentage paid by takers is more than the fee that makers get. Traditionally, the difference gets retained by the exchange or platform as fees for providing the service.
Traditional and Quanto Future fees
BitMEX also accommodates derivatives that come in the form of traditional futures and Quanto futures.
Traditional futures simply refer to the usual future contracts that allow you to buy or sell crypto products at an agreed price at a later date or time. Quanto futures, on the other hand, refer to contracts that deal with exchanges in some other domestic currency at an agreed-upon rate.
On BitMEX, both traditional and Quanto future fees follow the same maker and taker fees that are used in perpetual contracts. So, in both these instances, the maker fees lie at 0.0250%, and taker fees are at 0.0750%.
BitMEX Funding Fees
Funding fees are timely and periodic payments made towards both short and long traders. The ‘funding rate’ is the percentage that determines the amount to be paid/received. The fee is based on the difference between the spot price and the price of the perpetual contract.
While many crypto exchange fees include a section for funding, BitMEX does not charge any fees on either paid or received funding. So, that’ another plus point in favor of BitMEX as a trading platform.
BitMEX Deposit and Withdrawal fees
Deposits and withdrawal fees are one of the most common payments that users overlook. It’s easy to exclude them from your overall expenses and payments because they’re naturally part of any trading and exchange system. The most common example of deposit and withdrawal fees in crypto exchanges is the charge for making conversions. Converting your fiat currency into crypto tokens or currency usually incurs some sort of charge from the exchange.
Many times, these fees are usually low and nominal. However, failing to take these fees into account can harm your long-term calculations and accounting.
Imagine turning a profit from a big crypto trading platform. Now, you’re looking forward to withdrawing your funds so that you can finally get your finances in order. The next thing you know, the crypto exchange fees and withdrawal fees already retain a part of your earnings. That can be one of the most frustrating instances of crypto trading.
Fortunately, BitMEX does not charge its users any excess fees for deposits and withdrawals. That means, other payments aside, you really do own most of what you’ve earned from the platform, for instance from the participating in the BitMEX affiliate program. BitMEX, in this respect, is one of the only platforms that offer its users this kind of liberty and incentive to trade.
Other BitMEX fees
There are specific fees that come up when you’re dealing with hidden orders. Hidden orders will always entail a taker fee at the designated rate. Hidden orders are those orders that can break up a big order into smaller components that get registered in the exchange as individual orders.
For iceberg orders, the taker fee gets paid till the hidden components are executed entirely. Once that’s done, it becomes a regular order. You’ll receive the prescribed maker fee only after this phase.
Hidden orders are large investments or orders that have only a section of their orders visible on the exchange. The main intention behind creating these orders is to buy and sell larger orders without tipping off all eyes and ears in the market.
How to Calculate BitMEX fees
The precise calculation of BitMEX fees will depend on a number of factors that include components like your leverage, quantity, rates, etc. It’s something you’ll have to fine-tune as you continue trading and participating in the platform.
Remember, there are no one-size-fits-all formulas for figuring out all the fees at one go. That’s because there are variables that will determine the rate and amount you’ll pay or receive depending on your orders.
However, as an example, we’ll point out how the maker and taker fees roughly pan out. Let’s take the following figures as an example.
Suppose you place an order that’s worth $10,000 in Bitcoins. And there are no existing orders that can match yours. You naturally become a maker because you just created liquidity in the BitMEX market. Since the maker fee is constant across all the currencies, you’ll earn 0.0250% of the amount. Calculating the percentage gives you a maker fee of $2.5.
If you placed an order that matches this order perfectly ($10,000 worth), you’d eventually become the taker in this exchange. So, you’ll have to pay the exchange whatever taker fees are imposed. On BitMEX, the taker fee is also capped at 0.0750%. So, this means that you’ll have to pay $7.5 to the exchange for taking off liquidity from the BitMEX market.
So, getting an accurate calculation of your fees will give you a clear picture of how to proceed.
Calculating Profit and Loss
You can also use BitMEX’s native interface to calculate your potential profits and losses based on a few details. To start, go to the left navigation pane on the website. Under the ‘Place Order’ section, there is a calculator icon towards the top right sight (next to the settings button).
In the picture below, we’ve highlighted the calculator button on the top right side of the menu.
Clicking on this square icon will bring up the profit/loss calculator. It has four fields for you to enter the relevant information. The Quantity, Entry price, Exit price, and leverage are the four numbers you have to provide.
Once entered, the list on the left side provides all the vital information, including the profit/loss percentage, in an instant.
You can also toggle between Long and Short, depending on what kind of order you’re making. By default, the calculator should be in the Long option. With the Short option, you may have the same values. But the profit/loss percentage may be negative.
So, all in all, this feature is a convenient way to get a ballpark percentage of what kind of profits or losses you’ll experience, given the right information.
Trading on crypto exchanges seems like complicated exercises at first. But once you get a basic idea of the main elements, it all falls into place.
This article is specifically set to address the issues and questions on how the BitMEX fee schedule runs. For a more extensive understanding of the BitMEX system as a whole, check out our overview of BitMEX, which will explain all the components in a comprehensive manner.
Make sure you come and check back here regularly for newer information and the latest changes. Crypto markets and platforms are dynamic spaces that are subject to change and new development. For any worthwhile updates on BitMEX fees, this is the space where you’ll find the fastest updates and the most accurate assessments.