Opening and Closing Fees:
- Every time you open or close a margin trade, you're charged a taker fee of 0.075%.
Overnight Fees - The Swap Rate:
If you hold onto a margin trade overnight, you'll encounter a fee known as the "swap rate". This fee is a type of interest that arises from the difference between the interest rates of the two assets you're trading. This difference is called the "interest rate differential". In simple terms, it's the gap between what you might earn in interest from holding one asset versus another.
Calculating the Swap Rate:
To determine your swap rate, consider these factors:
- Trade Size: How large your trade is.
- Tick Size: A standard value set by the trading platform.
- Swap Point: An interest rate that is debited or credited for holding a position overnight, reflecting adjustments based on market dynamics and interest rate differentials between the two traded assets.
- USD Rate: Always set at 1, since we're measuring against USD.
- Funding Rate: A variable rate that adjusts based on overall trading activity and market conditions.
Swap Fee Formula:
Swap Fee = Trade Size × Tick Size × Number of Lots × Swap Point × USD Rate × Days
- Bitcoin (BTC): Imagine you're holding a long position in BTC, which is currently priced at $26,500.
The swap point or funding rate for the day could be anywhere between 0.01% to 0.1% of this value based on market conditions.
If the rate is 0.01%:
For holding onto your position for the day, you could be charged or credited $2.65.
If the rate spikes to 0.1% due to market volatility:
Your daily rate for that position would then be $26.5.
2. Ethereum (ETH): Now, let's assume you have a long position in ETH, valued at $1,600.
Following the same logic:
- At a modest 0.01% funding rate:
Your daily rate would be $0.16.
- In more volatile conditions with a 0.1% rate:
You would be looking at a swap rate of $1.6 for the day.
Note: Make sure to consult our margin assets list for rates and details.
Key Points to Remember:
- Fees apply to the total size of your trade, not just your initial investment.
- Swap points help maintain market balance after each trading day ends.
- The funding rate can shift, affecting your fees.
Being informed about fees, including understanding concepts like the interest rate differential, can lead to smarter trading decisions.
Stay informed, be proactive, and trade responsibly.