How to calculate Huobi contract transaction fee

To calculate transaction fees for Huobi contract trading, apply the formula: (Volume of Traded Contract * Opening Fee Rate) + (Volume of Closed Contract * Closing Fee Rate).

Nov 13, 2024 at 05:54 pm

How to Calculate Huobi Contract Transaction Fee: A Comprehensive Guide

Understanding the Fee Structure

Huobi's contract trading platform adopts a tiered fee structure based on several factors, including market volatility, trading volume, and liquidity. The transaction fee is calculated using the following formula:

Transaction Fee = (Volume of Traded Contract * Opening Fee Rate) + (Volume of Closed Contract * Closing Fee Rate)

Determining the Fee Rates

The opening and closing fee rates vary across different contract types and leverage levels. Huobi provides a detailed fee schedule on its website, which traders can refer to for precise fee calculations.

Step-by-Step Calculation Example

For a BTCUSD contract with a leverage of 20x, the following steps outline the transaction fee calculation process:

1. Identify the Opening Fee Rate:

   • Determine the corresponding opening fee rate based on the contract type and leverage from Huobi's fee schedule, e.g., 0.03% for BTCUSD 20x leverage.

2. Calculate the Opening Fee:

   • Opening Fee = Volume of Traded Contract * Opening Fee Rate
   • Suppose you buy 10 BTCUSD contracts. Thus, Opening Fee = 10 * 0.03% = 0.0003 BTC.

3. Identify the Closing Fee Rate:

   • Identify the closing fee rate for the BTCUSD 20x leverage contract, e.g., 0.04% from Huobi's fee schedule.

4. Calculate the Closing Fee:

   • Closing Fee = Volume of Closed Contract * Closing Fee Rate
   • If you sell the 10 BTCUSD contracts, Closing Fee = 10 * 0.04% = 0.0004 BTC.

5. Total Transaction Fee:

   • Transaction Fee = Opening Fee + Closing Fee
   • Therefore, the total transaction fee incurred is 0.0003 BTC (Opening Fee) + 0.0004 BTC (Closing Fee) = 0.0007 BTC.

Other Factors Affecting Transaction Costs

Beyond the base transaction fee, traders should consider the following factors that may influence the overall trading costs:

• Spread: The difference between the bid and ask prices in the market. A wider spread implies higher trading costs.
• Market Volatility: Contract trading often involves high volatility. Traders should anticipate potential price fluctuations and adjust their strategies accordingly.
• Liquidity: High-liquidity contracts offer tighter spreads and facilitate efficient order execution.
• Slippage: The difference between the intended order price and the actual execution price can result in additional costs.