Post-Only Orders: Minimizing Maker Fees on Futures Exchanges.

___

1. 1. Post-Only Orders: Minimizing Maker Fees on Futures Exchanges

Introduction

For traders venturing into the world of crypto futures, understanding the nuances of trading fees is crucial for maximizing profitability. One powerful technique to reduce these costs is utilizing “post-only” orders. This article will explain what post-only orders are, why they matter, and how to implement them on popular futures exchanges like Binance and Bybit. We’ll focus on clarity for beginners, highlighting key features and considerations. Before diving into post-only orders, it's helpful to understand the basics of How Crypto Futures Work and Why They Matter.

Understanding Maker and Taker Fees

Most cryptocurrency futures exchanges operate on a maker-taker fee schedule. Let's break down the difference:

• **Makers:** Makers *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. They “make” the market by providing bids and asks at different price levels.
• **Takers:** Takers *remove* liquidity by placing orders that are immediately matched against existing orders in the order book. These are often market orders or limit orders that execute instantly. They “take” liquidity from the market.

Exchanges incentivize making liquidity (being a maker) by charging lower fees for maker orders and higher fees for taker orders. This encourages a healthy order book with sufficient depth. You can learn more about trading strategies and maximizing profits in Crypto Futures Strategies: Maximizing Profits and Minimizing Risks with Effective Risk Management.

What are Post-Only Orders?

A post-only order is a specific type of limit order that *guarantees* it will be executed as a maker order. Instead of potentially being filled as a taker order if it happens to match with an order at the same price, the exchange ensures it only gets filled if it adds liquidity to the order book.

Here's how it works:

• You place a limit order.
• The exchange checks if your order would immediately match with an existing order (become a taker).
• If it would, the order is *cancelled* instead of being executed as a taker.
• Your order remains in the order book as a maker order, waiting to be filled by a subsequent taker.

This mechanism is vital for traders who actively use limit orders and want to consistently benefit from lower maker fees. It's particularly useful for those employing strategies like Futures Trading and News Trading Strategies where precise order placement is crucial.

Why Use Post-Only Orders?

The primary benefit of post-only orders is **fee reduction**. Over time, consistently using post-only orders can significantly lower your trading costs, boosting your overall profitability. This is especially true for high-frequency traders or those executing a large number of trades.

Beyond fees, post-only orders can offer:

• **Price Control:** You maintain control over the price at which you buy or sell.
• **Avoidance of Slippage:** By using limit orders, you avoid the risk of slippage that can occur with market orders, particularly during volatile market conditions. Slippage is the difference between the expected price of a trade and the price at which the trade is actually executed.
• **Strategic Order Placement:** You can strategically place orders to target specific price levels, aligning with your trading plan.

Implementing Post-Only Orders on Popular Exchanges

Let’s examine how to utilize post-only orders on Binance and Bybit, two of the leading cryptocurrency futures exchanges.

Binance

Binance provides a dedicated "Post Only" checkbox within its futures trading interface.

• **Accessing the Feature:** When placing a limit order on Binance Futures, you’ll find a “Post Only” option in the order placement panel. Ensure this box is checked *before* submitting your order.
• **Order Type:** Post Only only works with limit orders.
• **Cancellation:** If your limit order would execute as a taker, Binance will automatically cancel it. You’ll see a notification indicating this cancellation.
• **Interface Navigation:** Navigate to Futures > USD-M Futures or Coin-M Futures, then select your desired trading pair. Click on "Limit" under the order type selection.
• **Advanced Order Types:** Binance also offers other advanced order types that can be combined with post-only orders for more sophisticated trading strategies.

Bybit

Bybit offers a similar function, also labeled "Post Only."

• **Accessing the Feature:** Like Binance, Bybit’s post-only option is available during limit order placement. You’ll find a toggle switch labeled "Post Only" in the order form.
• **Order Type:** The feature exclusively applies to limit orders.
• **Cancellation:** Bybit will cancel any limit order that would execute as a taker.
• **Interface Navigation:** Go to Derivatives > Perpetual Contracts. Select your desired trading pair and then choose "Limit" as your order type.
• **Conditional Orders:** Bybit has a robust conditional order system that can be integrated with post-only orders to automate your trading strategies.

Important Considerations for Beginners

While post-only orders are beneficial, beginners should be aware of the following:

• **Order Might Not Fill Immediately:** Because the order is only filled if it adds liquidity, it may take longer to be executed, or it might not be filled at all if market conditions change.
• **Price Movement:** If the market moves significantly away from your limit price, your order may become irrelevant and never be filled.
• **Understanding Order Book Depth:** It's helpful to understand the order book depth to assess the likelihood of your order being filled as a maker.
• **Testing in a Demo Account:** Before using post-only orders with real funds, practice in a demo account to become familiar with how they work on your chosen exchange.
• **Volatility:** During periods of high volatility, post-only orders may be cancelled frequently as the market rapidly changes.
• **Expiration Time:** Ensure your order has sufficient time to expiration to allow for potential fills.

Beyond the Basics: Advanced Strategies

Once you're comfortable with the fundamentals, consider these advanced applications:

• **Grid Trading:** Combine post-only orders with grid trading strategies to automatically buy and sell at predetermined price levels, maximizing profitability in ranging markets.
• **Dollar-Cost Averaging (DCA):** Use post-only orders to execute DCA strategies, placing regular limit orders at consistent intervals.
• **Arbitrage:** Identify price discrepancies between exchanges and use post-only orders to capitalize on arbitrage opportunities.
• **Inflation Hedging:** Understand how futures trading, including strategies utilizing post-only orders, can be used to hedge against inflation. See The Role of Futures Trading in Inflation Hedging for more information.

Resources for Further Learning

To deepen your understanding of crypto futures trading, explore these resources:

• Ethereum Futures: Trading Guide for Newbies – A comprehensive guide to Ethereum futures.
• What Are the Basics of Day Trading Futures? – Learn the foundational concepts of day trading futures.
• How to Trade Futures with a Short-Term Strategy – Explore short-term trading tactics for futures contracts.
• Crypto futures expiration dates - Understand the importance of knowing when futures contracts expire.
• Deribit Options and Futures Documentation - Detailed documentation for Deribit, a popular derivatives exchange.
• Aptos futures - Information on trading Aptos futures contracts.
• Risk Management in Crypto Futures: 如何降低 DeFi 期货交易风险 – Crucial strategies for managing risk in the volatile crypto futures market.
• BTC/USDT Futures Handelsanalys - 6 januari 2025 - An example of a futures market analysis (note the date is a placeholder).
• How to Participate in Yield Farming on Cryptocurrency Futures Exchanges - Discover opportunities for yield farming within the futures ecosystem.

Conclusion

Post-only orders are a powerful tool for minimizing maker fees and enhancing profitability in cryptocurrency futures trading. By understanding the underlying principles and mastering the implementation on platforms like Binance and Bybit, beginners can significantly improve their trading results. Remember to start with a demo account, practice consistently, and always prioritize risk management. The ability to control your order execution and reduce fees is a significant advantage in the competitive world of crypto trading.

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

Join Our Community

Subscribe to @startfuturestrading for signals and analysis.