So you want to trade on the BitMEX crypto margin trading platform, but you’re not sure how much much it’s going to cost you in fees? Well, today I’m going to help clear that up for you. I’ve personally spent over 1000+ hours trading on BitMEX, so I’m aware of what’s involved and how much it really costs.
I’ve briefly touched on this topic in our full BitMEX review, but there is a lot more to it that needs explaining, and that is why I decided to create this guide.
Maker & Taker – what do they mean?
Before I get started to explain what the fees are, you need to have a basic understanding of the two main order types which you can use on exchanges as the fee rate changes depending on which order type you make.
‘Maker‘ orders are when you put in a bid to buy/sell something at a set price. This makes liquidity on the exchange and therefore adds liquidity to the order book. Maker orders are limit orders – a limit order is when you put in an order at a set price (for example; Buy BTC/USD at $7,134).
Maker (limit) orders have lower fees than Taker (market) orders as you are adding to the amount that can be bought/sold instantly on the exchange. You sometimes even earn money by providing liquidity (using Maker orders) on exchanges with limit orders.
A ‘Taker‘ order is an order which takes liquidity from the order book. This essentially means that you are taking someone else’s bid from the exchange which removes liquidity. To simplify this, if you do an instant buy/sell, this will be a Taker order.
Taker orders almost always have higher fees than Maker orders as you lower the amount that can be bought/sold instantly on the exchange.
Now that we’ve got that out of the way, it’s time to move on to how BitMEX fees work and how much you pay.
The fees on BitMEX are a percentage of the total notional order value, this means that if you use leverage (up to 100x leverage), the fee percentage is paid on the total volume of the trade, not just the amount of Bitcoin you use on the trade.
BitMEX provides a full fee schedule, but it doesn’t really explain how it works. So here’s the simplified version:
Types of fees on BitMEX
There are different forms of fees on the BitMEX exchange and it is important that you understand them all in order to trade profitably.
Trading fees (commission)
This is the main source of revenue for BitMEX – it is the fee you pay (or earn) when you make a trade on the exchange (negative fee means that you will earn the fee, not pay it).
The trading fees on BitMEX are as follows:
These fees apply to both the perpetual contracts and futures contracts on the BitMEX margin trading platform.
Funding fees (open positions only)
These are the fees you pay (or earn) when you have an open position. You could say that it is similar to when you have an overnight position on the Forex market. Basically, this fee is there to make sure that the trades on BitMEX can use leverage to trade, leverage involves borrowing funds to make a trade, and therefore you have to pay interest on the amount you borrow. Funding fees don’t go to BitMEX, they go to the traders on the other side of the market to you, this changes depending on the state of the market.
To see the current funding fees on the market you want to trade on BitMEX, go to the main trading page. It also tells you when the next funding fee settlement is.
If the funding rate is negative, long positions will pay short positions. This means that if you are shorting Bitcoin (selling), you will earn the funding rate every 8 hours.
If the funding rate is positive, short positions will pay long positions every 8 hours. Therefore, if you are long on Bitcoin (buying), you will earn the funding rate every 8 hours.
There is a standard withdrawal fee of 0.001 BTC on BitMEX. Visit this page to see the live BitMEX withdrawal fee in USD.
So, how much does it cost to trade on BitMEX?
Trading leveraged cryptocurrencies on exchanges like BitMEX can cost more than other exchanges without leverage because you pay fees on the total value, not just your initial margin for that trade.
BitMEX trade example (with fees)
Let’s say that you want to trade XBT/USD (the same as BTC/USD). You have 1 BTC on your BitMEX account, and you want to buy Bitcoin with 3x leverage. This means that you can purchase 3 BTC worth of futures contracts (or perpetual).
For the purpose of this example, let’s say that 1 Bitcoin costs $10,000. That 3 BTC worth of contracts would equate to $30,000. You long 30,000 contracts of BTC/USD (1 contract = 1 USD) at a market rate of $10,000. For this order, you pay 0.0750% on $30,000 which would equal $22.5 USD, not bad right?
After 24 hours, the price of Bitcoin has risen by $100 (+1% increase) and you have paid 3 lots of funding fees for the open position (0.01%*3 = 0.03%) which equates to another $9 in fees.
Now you want to close the position in profit. After the $100 increase (+1%) in the price of BTC, you would have made 3% before fees (as you used 3x leverage).
So your total profit before fees and closing the position would equal $300 (3% of $10,000). Now we want to close the position, we need to pay another 0.075% fees on the value of $10,300 x 3 BTC which comes to $30,900, therefore, the closing fees would be $23.175 USD.
Now that the trade is complete, let’s add up all the fees we paid to make the trade and subtract them from the profit before fees.
Opening fee: $22.5 USD
Funding fees: $9 USD
Closing fees: $23.175 USD
Total fees: $54.675 USD
Total profit after fees = $245.325 ($300 – $54.675)
I hope you found this example useful, it shows that BitMEX can be a powerful way of making a quick profit on Bitcoin but should be used carefully.
How to save money on BitMEX fees
The main way in which you can reduce your trading fees on BitMEX is by using a referral link like this one to sign up, this will give you 10% off fees for the first 6 months of your account life.
Here are some more tips which you can use to save money trading on BitMEX:
- Don’t keep positions open too long
- Refrain from using a market order when possible
- Trade the trend to save on funding fees
Calculating the fees you pay on BitMEX can be really difficult. If you’d like a more simple way of working out the fees for your trade, take a look at the BitMEX Calculator.
We’ve produced other guides to help you trade on BitMEX, take a look at the following guides if your interested:
What is the ‘liquidation price’ on BitMEX?
The liquidation price on BitMEX is the price at which your position will be liquidated – which means that you will lose all the funds in that position. To stop this from happening, use protective orders like Stop Losses to manage risk.