Introduction
The crypto market has seen a huge increase in how much crypto is being traded. As trading products improve, more investors and traders are becoming interested in crypto futures. However, just like other types of trading, crypto futures come with costs that can affect how much money you get to take home. This blog will talk about good ways to handle these costs for a better trading experience.
Understanding trading fees in crypto futures
As the crypto futures space grows, many trading platforms are competing to provide the best services out there. This competition translates into different fee structures and trading costs across platforms. Sometimes, sadly, these costs are not transparent to the user.
So, before you begin trading, it’s very important to understand these fees. Two main fees you will see with crypto futures are maker fees and taker fees.
The basics of maker and taker fees
A maker is a person who provides liquidity to the system. They do this by placing limit orders on an exchange’s order book. Makers help add depth to the market and earn a maker fee for their work.
For example, on a crypto exchange, if you set a buy order for BTC at a price that is lower than the market price, you add liquidity to the market. What this means is you give someone the chance to sell their BTC quickly. Your order stays on the order book until another trader decides to sell at your price. These orders are called ‘maker’ orders because they help make the market.
On the other hand, a ‘taker’ order removes liquidity from the order book. If you place a buy order for BNB at the current market price, you are essentially choosing to trade with one of the makers already out there. In doing this, you could be thought of as taking away someone else’s chance to buy BTC quickly.
Usually, maker fees are lower than taker fees. The amount charged can be different between exchanges and depends on the liquidity and market capitalization of the trading pair.
Fee structures across popular exchanges in India
The fee structures for trading cryptos vary across exchanges. It is thus advisable to compare these fees before you start trading. Even a small difference in trading fees can significantly impact your profits in the long term.
Here’s a quick comparison between the maker and taker fees of some of the top crypto exchanges in India. It is important to note that these fees are subject to change. It is always better to check the latest fee structure on an exchange on the official website.
| Exchange | Maker Fee | Taker Fee |
| CoinSwitch | 0.024% | 0.065% |
| CoinDCX | 0.025% | 0.070% |
| Mudrex | 0.2% | 0.2% |
Apart from maker and taker fees, you might have to incur additional expenses too. For example, the network fee for trading BTC is different from the gas fees you incur for trading ETH. Also, these fees are subject to price fluctuations in crypto prices and traditional currencies.
Types of expenses in crypto futures trading
When trading crypto futures, there are more costs to think about besides the ones discussed above. At first, these costs might seem small, but they can add up and hurt your profits over time.
These expenses include brokerage fees, network fees, and withdrawal fees. Knowing about these costs can help you plan better and use your money more wisely.
Brokerage fees explained
Traditionally, stockbrokers charge fees to handle buy or sell orders for their clients. In the crypto market, a crypto exchange works like a broker. It thus similarly takes a certain percentage of your trade value as a fee.
These fees often depend on the platform you choose for trading. Some platforms set a fixed fee for each transaction. For example, they could charge a flat ₹20 irrespective of the crypto’s price or the trade value.
While it is important to compare such fees, you should also consider the security and trustworthiness of the platform.
Network and withdrawal fees
Network fees, often called blockchain fees or gas fees, are payments to the miners or validators. They help verify and add transaction blocks to the blockchain. These fees are important for keeping the crypto ecosystem secure and trustworthy. The amount of network fees can change based on the crypto you are trading. For instance, gas fees on ETH tend to be more unstable than the network fees for BTC.
Withdrawal fees are the price you pay when moving money from your crypto exchange wallet to your bank account. These charges can vary depending on the trading platform you use.
By knowing about these extra costs, you can make smarter choices while trading crypto. It’s best to select an exchange that is open about its fee structure.
Strategies to minimize trading expenses
You cannot completely get rid of trading fees, but you can use some tips to lower them a lot. Below are a few strategies you can employ to lower costs.
Choosing the right exchange platform
The rise in popularity of cryptos has led to many crypto exchange platforms popping up worldwide. Each exchange has its own features, fees, and safety measures. This makes it important to pick a platform wisely. You should think about things like trading fees, but also factor in security and the platform’s reputation.
Always select an exchange that is known for its safe setup and focuses on protecting user funds and data. Also, make sure the platform is compliant with local rules and provides a smooth trading experience.
You should also check that the platform has enough liquidity for the cryptos you want to trade. Using a platform with low liquidity can cause big changes in price, hurting your profits. For example, if you want to trade ETH, ensure that the exchange has ample activity for the ETH/USDT trading pair.
Utilizing low-fee periods and discounts
Most crypto exchanges periodically have special offers. They may lower trading fees or offer zero trading fees. This is to attract more users to their website. New exchanges often use these short-term benefits to grow their user base.
You should watch out for such deals. They can help lower your trading costs. You can also sign up with financial advice platforms to get news on the latest offers in the crypto world.
Many exchanges also give discounts to traders who trade a lot. Each exchange has different standards for who counts as a high-volume trader. But more often than not, it depends on how much trading is done and the market cap of each digital currency.
CoinSwitch Pro futures fee structure
CoinSwitch Pro has fair and clearly stated fees for trading crypto futures. It also offers a simple interface and advanced chart tools. All of this makes it easier to trade crypto.
Fee breakdown and comparison
CoinSwitch Pro has a maker fee of 0.02% and a taker fee of 0.05% for trading BTC and ETH futures contracts. If you trade more, the fees get better.
When you compare the fees of top crypto exchanges, CoinSwitch Pro stands out. The low fees are good for both new and experienced traders.
That said, trading fees are not the only thing to think about when picking a platform. You should also look at how reliable, secure, and liquid the platform is. These factors are very important for a better trading experience. And CS Pro stands out here as well.
How to leverage CoinSwitch Pro for lower fees
CoinSwitch Pro has low trading fees for traders who buy and sell a lot. So it’s great if you trade often. The platform also has some special deals with zero trading fees for certain pairs. For example, you can trade XRP/USDT or ETH/USDT without fees during special times.
CoinSwitch Pro makes it easy to start your trading crypto. You can buy crypto directly from your bank account. It also supports instant fiat currency deposits. This way, you don’t have to use another platform to buy or sell crypto.
Make sure to check the ‘Fees’ section on the platform. This will help you stay updated on the latest fees and any offers.
Calculating your trading fees
Once you understand how trading fees affect your profits, take some time to get used to calculating these fees. There are many online tools that can help you figure out these costs. This will help you review your trades.
Tools and calculators for Indian traders
Many websites and online platforms offer crypto trading fee calculators. These tools include the latest trading fees from major crypto exchanges in India. They estimate the trading costs before you complete your trade.
These calculators are especially useful for beginners who are new to crypto trading. They show information about maker and taker fees and help calculate other costs, such as brokerage fees, GST, and transaction fees.
However, be aware that these calculators might not include all the costs of trading. Always check with your exchange to find the right trading fee details.
The value of cryptos and their use as a means of payment can also change, affecting your total trading costs. So, think about such outside factors—like central banks’ regulations and market trends—as well before you make a trade.
Case study: Calculating fees on high-volume trades
Suppose you are a busy trader wanting to buy 10,000 USD coins from a crypto exchange. The exchange has a maker fee of 0.1% and a taker fee of 0.2%. This means you will pay $10 in maker fees and $20 in taker fees.
Navigating market volatility and fees
Crypto markets can be very volatile. This means prices change a lot. Market sentiment, news, and new rules often cause this volatility. It can affect your trading costs in different ways. Because of this, it is important to change your trading strategy based on the market situation.
For instance, when volatility is high, network fees go up. This happens because more people are using the blockchain network. Knowing how market volatility connects to your trading fees can help you make smarter choices.
Impact of market fluctuations on fees
When the crypto markets see big price changes, more people start trading. This is when slippage happens. Slippage is when your order goes through at a price that is different from what you wanted. It often happens more when the market is really volatile because crypto prices change quickly.
Also, the fees you pay to complete a trade, known as network fees or gas fees, can go up a lot during times of high volatility. For instance, you may pay more fees when the BTC price is rising fast than when it is moving slowly.
So, it is very important to consider trading costs when you make trading choices. If your trading plan is not clear, you could end up paying more in fees than you make in profits.
Strategies to trade efficiently in volatile markets
To be successful in crypto trading one of the key things to do is to protect your capital. This means limiting your losses. Using strict stop-loss orders can help you manage your losses when the market is very volatile. This strategy can also help improve your risk-to-reward ratio.
If you are not an experienced trader, it’s best to avoid trading during volatile market times. If you still want to trade, use only a small amount you are willing to risk.
Additionally, spreading your investments across different cryptos is a smart way to manage risk and reward. For example, instead of putting all your money into USD Coin, you can look into other altcoins like TRX or invest in a stablecoin. The crypto market is always changing, and new tokens seem to come out every week. So, diversifying your portfolio can help you handle your overall portfolio risk better.
Advanced trading techniques to reduce costs
As the crypto market grows and gets better, traders are always creating new trading methods to do better. These methods aim to lower costs and increase profits. One popular method used by traders around the world is placing limit orders.
Using limit orders to your advantage
Exchanges often reward makers with lower trading fees. When you use a limit order, you act as a maker and add liquidity to the market. This can lower your trading costs over time.
A limit order lets you control the price you want to pay or receive for trading crypto futures. This can help you avoid losing money due to sudden price changes during unstable market times. For example, if you think the price of Tether will drop soon, you can set a buy order at a lower price instead of placing a regular order at the current market price. Your order might be filled when the price of Tether goes down.
Using limit orders can help reduce your costs, but remember, there’s no guarantee that your orders will be filled, especially if they are far from the market price.
The role of crypto futures contracts in cost reduction
Futures contracts are linked to the spot market. They let traders guess the future price of an asset using leverage. This tool helps manage risks or protect against losses in the spot market.
You need more money for spot trading—to start and keep your trade. In contrast, futures trading allows you to take bigger positions with less money. Trading futures on a blockchain platform also tend to be cheaper than spot trading because you only pay a small fee based on the contract’s value.
Futures trading is appealing because of the high leverage. However, remember that leverage can work both ways. If a trade does not go well, you could lose all your money. It’s smart to use stop-loss orders when trading futures, especially in a rapidly changing market.
For instance, trading Dogecoin futures during high volatility can be especially risky. A stop-loss can help protect your investment in such cases.
Always trade within your risk limits. Crypto futures trading is not suitable for everyone.
Conclusion
In crypto futures trading, it’s very important to manage your expenses to make a profit. You need to know about maker and taker fees, brokerage costs, and network fees. To keep costs low, pick exchanges carefully and take advantage of times when fees are lower. Using tools like CoinSwitch Pro can also help save money. You should try techniques like limit orders and futures contracts to cut expenses even more. Dealing with market volatility and fees requires good planning. By checking fees closely and using helpful tools, traders in India can lower their trading costs and improve their trading experience.
FAQs
1. What are maker and taker fees in crypto futures trading?
The crypto market works like regular stock exchanges. When you trade in crypto, exchanges charge fees. These are called maker and taker fees. Maker fees are usually lower because when you place such orders you add liquidity to the order books. Taker fees apply at a higher rate as taker orders are assumed to take liquidity away.
2. How do I calculate trading fees for spot and margin trading?
Trading fees for spot and margin trading are usually a percentage of the trade amount. This often depends on how much prices change in crypto and traditional currencies. The fees can vary for each crypto based on its market capitalization.
3. What are the standard maker and taker fees for futures trading?
In the crypto market, there aren’t standard fees for makers and takers when trading futures contracts. These fees vary based on the cryptos you trade. For example, the trading fee for BTC’s price can be different from that of ETH. This is due to the differences in their technology and demand.
4. How can Indian traders mitigate high trading expenses?
Just like regular markets, more trading volume often leads to lower trading fees. Exploring and checking out different exchange platforms can help you lower your trading costs.
5. Are there any fee rebates available for high-volume traders in India?
Yes, many exchanges have low trading fees and great brokerage rewards. This helps them attract large crypto investments. These perks often make traders choose one exchange over another. They prefer it because of better liquidity for certain trading pairs and better rewards.
