How to calculate BitMEX contract fees

By understanding the intricacies of BitMEX's fee structure, traders can strategize effectively, maximize profitability, and mitigate risk by leveraging tiered taker fees, maker rebates, and funding fees to optimize their trading outcomes.

Nov 09, 2024 at 07:10 am

How to Calculate BitMEX Contract Fees

Understanding the fee structure of BitMEX contracts is essential for maximizing trading profitability and managing risk effectively. This intricate fee system comprises multiple elements, including taker fees, maker fees, and funding fees. Grasping the intricacies of each fee component empowers traders to strategize effectively and optimize their trading outcomes.

1. Taker Fees

Taker fees are levied upon executing an order that matches an existing order in the order book. Takers remove liquidity from the market by fulfilling their orders against existing orders, contributing to the smooth functioning of the exchange. BitMEX's taker fees are tiered and vary depending on the contract traded and the volume of a trader's trading activity within a 30-day period.

• Tier 1: 0.075% for trades up to 100 BTC in notional value within a 30-day period.
• Tier 2: 0.05% for trades between 100 BTC and 500 BTC in notional value within a 30-day period.
• Tier 3: 0.025% for trades exceeding 500 BTC in notional value within a 30-day period.

2. Maker Fees

Maker fees are levied upon placing an order that adds liquidity to the market. Makers create liquidity by placing limit orders, which can subsequently be matched by other traders. This action enhances market depth and trading efficiency. BitMEX incentivizes market makers by offering rebates on maker fees, enabling them to profit from providing liquidity.

• Maker Rebate: -0.025% for all executed limit orders.

3. Funding Fees

Funding fees are periodically exchanged between long and short positions to maintain a balanced market. When the funding rate is positive, long positions pay short positions, incentivizing traders to open short positions and cool down an overheated market. Conversely, when the funding rate is negative, short positions pay long positions, encouraging traders to open long positions and curb a sell-off. Funding fees are calculated every 8 hours and applied to open positions.

Steps to Calculate Contract Fees on BitMEX

1. Identify the Contract: Determine the specific contract you intend to trade, as fees vary across different contracts.
2. Calculate the Notional Value: Multiply the contract size by the entry price to determine the notional value of your trade.
3. Determine Your Fee Tier: Based on your 30-day trading volume, identify the appropriate fee tier.
4. Apply Taker Fees (if applicable): If your order matches an existing order, multiply the notional value by the applicable taker fee rate.
5. Account for Maker Rebates (if applicable): If your order adds liquidity, multiply the notional value by the maker rebate rate (-0.025%).
6. Calculate Funding Fees (if applicable): Multiply the notional value of your open position by the funding rate for the specified time interval.
7. Net Fee Calculation: Combine the taker fees, maker rebates, and funding fees (if applicable) to determine the overall fee for your trade.
8. Review Fee Structure Regularly: BitMEX may periodically adjust its fee structure. Regularly reviewing the latest fee schedule ensures you remain informed of any changes that could impact your trading strategy.