Byline: Hannah Parker
Image source: Galicia
In the growing crypto economy, various platforms with distinct features are emerging. Bybit is a prominent cryptocurrency exchange platform that has gained trust among traders and investors. Founded in March 2018, Bybit offers a centralized exchange (CEX) with a fast-matching engine, excellent customer support, and multiple languages. It serves over 10 million individuals and institutions, providing access to 100+ assets and contracts, including derivatives, launchpad projects, NFT Marketplace, and more. Bybit is also associated with Formula One team Oracle Red Bull Racing, NAVI, Astralis, and other esports and football teams.
In addition to over 300 spot trade pairs, Bybit offers over 100 crypto tokens, including popular coins like BTC, ETH, BIT, SOL, APE, DYDX, LTC, DOGE, AVAX, MATIC, DOT, and more. Additionally, the exchange has a maker-taker model-based tiered fee structure. Non-VIP, VIP 1, VIP 2, VIP 3, and Pro 1, Pro 2, and Pro 3 are the different tier levels as mentioned by expert traders at Bitai Method Official. In a nutshell – maker and taker costs are 0.10% for spot trading and 0.06% (taker) and 0.01% (maker) for perpetual and futures trading, respectively, for non-VIP level customers. Spot trading fees for Pro 3 are 0.02% for the taker and 0% for the maker, while derivatives trading fees are 0.03% for the taker and 0% for the maker.
This article will highlight and express the key features of Bybit and give an in-depth explanation of its trading fees.
Bybit Key Products and Features
- Perpetual contracts – A perpetual contract is a type of financial derivative that is used in both spot and futures trading.
Spot, futures, and perpetual contracts trading
Perpetual contracts, on the other hand, have no expiration date, in contrast to spot trading, which requires immediate settlement, and futures contracts, which require payment on a specific day in the future. There are more prospects for monetary benefit because it offers a hassle-free trading option and permits traders to keep positions for as long as they choose.
- Options trading – Bybit provides options trading, which gives investors the flexibility to purchase or sell stocks at a given price on a specific date. Options also serve as a type of insurance that lowers the risk brought on by unexpected changes in the market.
- Advanced trading tools – Technology-advanced trading tools – Bybit has developed trading tools made specifically for crypto derivatives and all of the currencies on the site. These instruments feature conditional orders, different chart layouts, intelligent leverage selectors, real-time PNL monitoring, and trading view charts.
- Dual price mechanism – In order to safeguard its traders from market manipulation and maintain a fair trading environment, Bybit implements the Dual-price technique. Bybit employs the Mark Price, which refers to the worldwide current index price, as the liquidation trigger rather than the Last Traded Price, which is used by the majority of exchanges. The Dual Price Mechanism lessens the incentives for rogue actors trying to manipulate the market and safeguards investors from wrongful liquidations.
- Flexible leverage – Bybit offers perpetual contracts with 100x leverage. But how do Spot Futures and Perpetual Contracts differ in terms of leverage? While borrowing fees may be high in the conventional spot margin market and leverage is typically 3 to 5 times, the existing exchanges only offer 5 to 20 times leverage for futures contracts. The leverage and margin of an open position can, however, be changed at any time thanks to Bybit Perpetual Contracts, which provide up to 100x leverage. This method of risk management is incredibly adaptable and guarantees the finest trading experience.
- Other perpetual contracts are also offered, such as BTC/USD, ETH/USD, XRP/USD, and EOS/USD. As well as cross margin, users can employ isolated margin. Leveraged tokens, crypto futures, crypto options, and inverse perpetual are all available to customers.
- Market to market – The price of the contracts is tied to the spot market on Bybit, with the most recent traded price closely tracking the current price. The term “Funding” refers to the main process utilised to link its price to the spot price. The last traded price is marked to market every eight hours since funding is switched between long and short positions on a daily basis.
- Comprehensive contract loss mechanism – To safeguard its investors, Bybit employs a thorough contract loss mechanism. When positions cannot be sold at bankruptcy price, the contract loss mechanism is utilised to decide who is responsible for paying the price.
System of Socialised Losses vs. System of Auto-Deleveraging
Bybit uses the “Auto-Deleveraging system” as our contract loss mechanism instead of the more popular socialised loss system, which requires all winning traders to contribute to the expenses. This safeguards investors from being impacted by big losses brought on by risky traders. The ADL system ranks each trader according to their profit ratio and effective leverage, and the most successful and highly leveraged traders are the first to be unleveraged.
Bybit Trading Fees
Transaction costs for executing orders on an exchange are referred to as trading fees. These fees vary depending on the type of transaction and can be easily adjusted. In the case of cryptocurrency transactions, trading fees encompass various charges.
Exchange commissions are primarily determined by the trading volume. Beyond just trades, fees are applicable to deposits, withdrawals, funding, margin and leverage usage, and bid-ask spreads. Commission rates on exchanges typically span from 0.1% to 1% or even higher for each trade. These rates differ across exchanges due to varying trade contracts and exchange policies.
When it comes to basic spot trading, Bybit charges a competitive 0.1% spot trading fee for both makers and takers. Bybit also offers different VIP levels for high-volume traders with incentives of even lower trading fees.
Maker and Taker Fees
Based on how quickly an order is filled, Bybit distinguishes between maker and taker fees. Market Orders, taker orders that immediately go into effect and buy or sell at the best price available, are executed.
Limit Orders, on the other hand, are set at a pre-determined price and are fulfilled when the market price is equal to or higher than the limit. Based on when they are filled, limit orders can either be considered maker orders or taker orders.
Taker Fee: Order Value – Taker Fee Percentage
Maker Fee: Order Value Maker Fee Percentage
If you trade futures on Bybit, you will only be charged 0.01% for placing an order and 0.06% for accepting one that has already been placed.
If you trade frequently, Bybit will reduce these fees. Therefore, you can receive a discount on the fees if you do a lot of trading in a given month, making trading more affordable for you.
Bybit Spot Trading Fee Calculations
Trading Fee = Trading Fee Rate x Quantity of Filled Orders
If BTC is currently worth $40,000, then. For 20,000 USDT, traders can buy or sell 0.5 BTC.
Trader A uses a Market Order and USDT to purchase 0.5 BTC.
Trader B uses a Limit Order and BTC to purchase 20,000 USDT.
Taker’s Fee: 0.5 x 0.10% = 0.0005 BTC for Trader A
Maker’s Fee for Trader B: 20,000 multiplied by 0.10% is 20 USDT
Once the order has been fulfilled:
Trader A places a market order to purchase 0.5 BTC, and as a result, pays a taker’s fee of 0.0005 BTC. Trader A will consequently get 0.4995 BTC.
Trader B purchases 20,000 USDT using a limit order, incurring a maker’s charge of 0.1%. Thus, Trader B will be compensated with 19,980 USDT.
Spot trading fee cross-platform comparison
|Maker Fee Rate
|Taker Fee Rate
|Net Fee Accrued to Platform
|Binance (VIP 0)
Source: Official figures from each crypto exchange as of July 6, 2023.
It is crucial to keep in mind that the trading fee unit levied is based on the cryptocurrency purchased and that orders that are cancelled or partially filled are not charged a trading fee.
Bybit margin fees
Fees for spot trading, interest, and liquidation are all included in Bybit’s margin trading. Leveraged positions in the spot market must be purchased or sold for the previously specified 0.1% spot fee to be charged. Another charge that pertains to trading on margin is interest, which is computed hourly. Traders have the option to pay back the loan at any time, with interest calculated based on the number of hours actually borrowed.
Amount to Borrow x Daily Interest Rate x 24 Hours is the formula used to determine the interest.
Bybit Options Fees
On Bybit, the maker and taker costs for trading options start at 0.03% for each party. Options fees for VIP users who transact for hundreds of millions of dollars can be reduced by as much as 0% for makers and 0.1% for takers. Under normal circumstances, you will most likely be paying the 0.03% creator and taker fee.
Bybit Leverage Fees
Trading leverage up to 100x is available through Bybit, which significantly increases trading commissions. Using 2x leverage would double the fee, applied to the leveraged amount (200 USDT). Leverage raises both trading costs and potential gains.
Bybit Funding Rate
The real-time funding rate on Bybit depends on the interest rate and premium index. The interest rate considers the borrowing cost difference between base and quoted currencies. To calculate the funding charge, the funding rate affects a trader’s position, and the Premium Index reflects the contract’s trading price versus mark price. These rates are recalculated every minute, with exchanges occurring at set intervals like every eight hours.
Among the many cryptocurrency exchange platforms available, Bybit stands out as a top choice. This is because Bybit offers great value with its low costs, efficient services, and strong security. If you’re looking for safety and affordability in an exchange, Bybit is the way to go.
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