Binance Futures Trading Fees Explained and How to Get Discounts
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Contents 4
In this post, we'll look at the trading fees, funding fees, and liquidation fees you may encounter when trading futures on Binance. We'll also walk you through how to calculate each fee in detail, along with ways to get discounts.
1. Binance Futures Trading Fees
Futures trading fees are the most basic cost, charged every time an order is filled. On Binance futures, fees differ depending on whether you are a Maker or a Taker, and you can get discounts through your VIP level or by using BNB.
(1) How much are maker and taker fees?
| Contract type | Maker fee | Taker fee |
|---|---|---|
| USDⓈ-M contracts | 0.02% | 0.05% |
| COIN-M contracts | 0.02% | 0.05% |
- Maker: Provides liquidity to the market with limit orders, and generally pays lower fees.
- Taker: Takes liquidity by instantly filling existing orders with market orders, and pays higher fees than makers.
Want to get a fee discount? Whenever possible, trade as a maker. This way, you can save 0.03% in fees on every trade. Also, on Binance, you get a 10% discount when you pay fees with BNB. Finally, raise your VIP level based on your trading volume and BNB holdings to enjoy additional discounts.
(2) How are fees calculated?
Trading fees are calculated based on the position size and the trade price.
- USDⓈ-M contract fee calculation: Position size * Trade price * Fee rate
- COIN-M contract fee calculation: (Number of contracts * Contract size) / Trade price * Fee rate
For example, if you buy 0.01 BTC at 44,000 USDT, the value of your position is 440 USDT. If you pay the 0.02% maker fee, a single trade incurs a fee of 8.8 USDT.
2. Binance Funding Fees
Funding fees occur in perpetual futures contracts and refer to the periodic exchange of fees between long and short positions. Funding fees are a mechanism designed to narrow the gap between the futures market price and the spot market price.
When the futures price is higher than the spot price, long position holders pay the fee, and in the opposite case, short position holders pay long position holders.
(1) How are funding fees determined?
Funding fees are determined by the funding rate. When the market is in Contango, long position holders pay the fee, and when it is in Backwardation, short position holders pay the fee.
| Funding rate | Long position holders | Short position holders |
|---|---|---|
| Positive (+) | Pay funding fee | Receive funding fee |
| Negative (-) | Receive funding fee | Pay funding fee |
(2) When are funding fees settled?
Funding fees are usually settled every 8 hours, but depending on market conditions, they may be settled every 4 hours or every hour. Since funding fees are a cost incurred for keeping a position open, holding a position for a long time can make the fee burden significant, so be careful.
3. Binance Liquidation Fees
Liquidation fees are charged when a forced liquidation occurs because the maintenance margin requirement is not met. When a user's position is liquidated, Binance collects a certain percentage of the assets as a fee. Since some assets may be lost during the liquidation process, you should be especially careful when using leverage.
(1) When does liquidation happen?
Liquidation happens automatically when a position reaches its liquidation price, and it is executed automatically by the system. When liquidation occurs, part of the assets invested in that position is paid to Binance as a liquidation fee. For details on how liquidation works, see Binance's liquidation mechanism.
(2) How much is the liquidation fee?
The liquidation fee is usually 1–2% of the position and varies by contract type. For example, the liquidation fee for the BTCUSDT contract is 1.25%. You can find more details in Binance's liquidation fee explanation.
Final Summary
That wraps up our look at the main fees you incur when trading futures on the Binance exchange. There are three main types of fees: 1) trading fees, 2) funding fees, and 3) liquidation fees.
Trading fees differ between makers (0.02%) and takers (0.05%), and you can get discounts through BNB and VIP levels. Funding fees are exchanged between longs and shorts to adjust the gap between the futures price and the spot price, and 3) liquidation fees are incurred upon forced liquidation.
