Post-Only Orders: Reducing Maker Fees on Different Exchanges.

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1. Post-Only Orders: Reducing Maker Fees on Different Exchanges

Introduction

As a newcomer to crypto futures trading on platforms like Binance, Bybit, and others, understanding the nuances of order types and associated fees is crucial for maximizing profitability. One powerful technique to reduce trading costs is utilizing “post-only” orders. This article will break down what post-only orders are, how they work, and how to implement them on popular exchanges, equipping you with the knowledge to navigate the world of crypto futures more effectively. We’ll also touch upon essential related concepts like Limit Orders, Market Orders, and the importance of Stop Loss Orders for risk management. Before diving in, it's helpful to understand the [[Basics of Crypto Exchanges for New Traders**].

Understanding Maker vs. Taker Fees

Crypto exchanges typically operate on a maker-taker fee structure.

**Makers** are traders who *add* liquidity to the order book by placing orders that aren't immediately matched. These are typically Limit Orders placed away from the current market price. Because they contribute to market depth, makers generally pay lower fees.
**Takers** are traders who *remove* liquidity by placing orders that are immediately matched against existing orders in the order book. These are often Market Orders or aggressive Limit Orders that execute right away. Takers typically pay higher fees.

The difference in fees can be significant, particularly for high-frequency traders. Post-only orders are designed to *ensure* you are always a maker, thereby benefiting from the lower maker fees. You can learn more about Low fees on various platforms.

What are Post-Only Orders?

A post-only order is a special type of order that instructs the exchange to *cancel* the order if it would be executed as a taker. In essence, it guarantees that your order will only be placed on the order book as a limit order, waiting to be matched by another trader. If your order would immediately fill against an existing order (making you a taker), the exchange will simply not execute it.

This is incredibly useful for traders who want to avoid taker fees and strategically place orders to benefit from price movements. It's particularly effective in volatile markets where quick execution isn’t as critical as securing a favorable price. Understanding Limit Orders for Futures: Setting Your Price is foundational to grasping post-only orders.

Why Use Post-Only Orders?

**Reduced Fees:** The primary benefit is lower trading fees. Saving on fees directly impacts your overall profitability.
**Precise Entry/Exit:** Post-only orders allow you to specify the exact price at which you want to enter or exit a trade. Limit Orders for Futures: Precise Entry & Exit detail this benefit.
**Avoid Slippage:** By not executing immediately, you avoid the risk of slippage – the difference between the expected price of a trade and the actual price at which it is executed.
**Strategic Order Placement:** You can strategically place orders to take advantage of anticipated price movements.

Implementing Post-Only Orders on Popular Exchanges

Let’s examine how to implement post-only orders on some of the leading crypto futures exchanges.

Binance Futures

Binance Futures offers a “Post Only” checkbox within the order placement window.

1. Navigate to the Futures trading interface. 2. Select your desired trading pair. 3. Choose "Limit" order type. 4. Before placing the order, check the "Post Only" box. 5. Set your price and quantity. 6. Confirm the order.

If the order would be executed as a taker, it will be cancelled. Binance also offers advanced order types and TradingView Integration with Futures Exchanges for more sophisticated strategies.

Bybit

Bybit also provides a dedicated “Post Only” option.

1. Select Futures trading. 2. Choose your trading pair. 3. Select "Limit" order type. 4. Activate the "Post Only" toggle. 5. Enter your price and quantity. 6. Confirm the order.

Bybit is known for its user-friendly interface and robust features.

Other Exchanges

Many other exchanges are beginning to offer post-only functionality. Look for a similar “Post Only” checkbox or toggle within the order placement window when using a Limit Order. Always consult the exchange's documentation for specific instructions. Remember to familiarize yourself with Types of Crypto Exchanges to understand the landscape.

Advanced Considerations & Related Order Types

While post-only orders are beneficial, it's important to understand their limitations and how they interact with other order types.

**Time in Force:** Consider the "Time in Force" setting. Options include "Good Till Cancelled" (GTC), which keeps the order active until filled or cancelled, and "Immediate or Cancel" (IOC), which attempts to fill the order immediately and cancels any unfilled portion. For post-only orders, GTC is generally preferred.
**Stop-Limit Orders:** Combining a post-only limit order with a Stop Loss Order can create a powerful risk management strategy. You can set a stop price that, when triggered, converts your post-only limit order into a market order to limit potential losses. Setting Stop Loss Orders and Utilizing Stop-Loss Orders for Capital Preservation are essential reading.
**Iceberg Orders:** In some cases, you might want to hide the size of your order from the market. Análise das Ordens Bloqueadas (Iceberg Orders) explain how to execute large orders without revealing your full position.
**Trading Pairs:** Understanding the dynamics of different A Beginner's Introduction to Trading Pairs on Exchanges is important for successful trading.
**Market Volatility:** Post-only orders are most effective in relatively stable markets. In highly volatile conditions, your order may not be filled at all.

The Importance of Backtesting and Analysis

Before implementing any trading strategy, including post-only orders, it's crucial to backtest it using historical data. This allows you to assess its effectiveness and identify potential drawbacks. The Post-Trade Analysis Ritual: Learning From *Every* Outcome emphasizes the importance of reviewing your trades and learning from both successes and failures.

Potential Drawbacks of Post-Only Orders

**Order May Not Be Filled:** The primary drawback is that your order may not be filled if the market price doesn't reach your specified limit price.
**Opportunity Cost:** While waiting for your order to be filled, you may miss out on other trading opportunities.
**Requires Patience:** Post-only orders require patience and discipline. You need to be willing to wait for the market to come to you.
**Gas Fees (Ethereum-based futures):** On platforms dealing with Ethereum-based futures, be mindful of Ethereums gas fees which can impact profitability even with reduced maker fees.

Choosing the Right Exchange

Selecting the appropriate exchange is a critical step. Consider the following factors:

**Fee Structure:** Compare the maker and taker fees across different exchanges.
**Liquidity:** Higher liquidity generally leads to faster order execution and lower slippage.
**User Interface:** Choose an exchange with a user-friendly interface that you find easy to navigate.
**Security:** Ensure the exchange has robust security measures in place to protect your funds.
**Available Trading Pairs:** Verify that the exchange offers the trading pairs you are interested in.
**Customer Support:** Responsive and helpful customer support is essential.
**Reviews and Comparisons:** Utilize resources like Navigating the Best Crypto Exchanges: A Beginner's Guide to Exchange Reviews and Comparisons to make an informed decision. Also, consider exploring Your First Step into Crypto Futures: Best Exchanges for 2024"" for recent recommendations.

Avoiding Common Pitfalls

**Confirmation Bias:** Be aware of “Confirmation Bias & Crypto: Why You Only See What You *Want* to See in the and avoid making trading decisions based solely on your preconceived notions.
**Emotional Trading:** Avoid letting emotions influence your trading decisions. Stick to your strategy and avoid impulsive actions.
**Overleveraging:** Be cautious with leverage. While it can amplify your profits, it can also magnify your losses.
**Ignoring Risk Management:** Always use Stop Loss Orders and other risk management tools to protect your capital.
**Not Understanding Order Types:** Thoroughly understand the different order types available and how they work. The Basics of Market Orders in Crypto Futures Trading provides a good starting point.

Conclusion

Post-only orders are a valuable tool for reducing trading fees and improving profitability in crypto futures trading. By understanding how they work and how to implement them on different exchanges, you can gain a significant edge. Remember to combine post-only orders with sound risk management practices, thorough analysis, and a disciplined trading approach. As you gain experience, you can refine your strategy and adapt it to changing market conditions. Continued learning and adaptation are key to success in the dynamic world of crypto futures.

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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