Achieve cost-effective trading with the Post-Only option

Post-Only is an optional feature that can be added to limit orders and only executes when liquidity is provided. By utilizing this option, traders can avoid high transaction fees caused by unintended market price movements. Post-Only is supported for spot trading and perpetual futures trading (both standard and UTA versions), making it especially effective for large traders engaged in scalping or those aiming for market making strategies.

How Post-Only Works: The Relationship Between Order Book and Fees

Limit orders selected as Post-Only are predicated on being added to the order book. If the market price already meets the order conditions at the time of placement, the system will automatically cancel the order. In other words, Post-Only is a conditional order that only executes if it is added to the order book.

The main advantage of this mechanism lies in the fee structure. Orders that are filled from the order book incur maker fees (lower fees for liquidity providers). Conversely, orders that are immediately matched at the market price are subject to taker fees (higher fees for liquidity takers). Using Post-Only helps traders avoid unintended taker fees and aim for executions with favorable maker fees.

Maker vs. Taker: Different Costs Based on Market Price Movements

Post-Only is most effective in volatile market environments. Let’s look at a specific example.

Trader A places a buy limit order for 100,000 contracts of BTCUSD at $9,000. At the time of order placement, the best ask in the order book is $9,001, but the market rapidly moves, and by the time the order is sent, the best ask has dropped to $8,995.

Without Post-Only: The limit buy order at $9,000 compares to the current best ask at $8,995, which is more favorable. The system interprets this as an opportunity and immediately executes the order as a market order. As a result, Trader A pays taker fees instead of maker fees, which can lead to unexpected costs, especially for large trades or scalping strategies.

With Post-Only: In the same scenario, since the best ask has moved to a more favorable price than the order price, the order would normally execute immediately. However, with Post-Only enabled, the system recognizes that this order would be filled from the market price without being added to the order book, so it automatically cancels the order. Consequently, Trader A avoids paying unintended taker fees.

When to Use Post-Only

Post-Only is most beneficial in the following trading scenarios:

High Volatility Environments: During rapid market movements, limit orders risk being filled at unexpected prices. Post-Only prevents this, maintaining planned cost structures.

Scalping Strategies: Short-term traders aiming to profit from small price differences rely heavily on fee margins. Post-Only ensures they benefit from maker fees, which are typically lower.

Market Making: Traders providing liquidity to earn maker rebates can use Post-Only to guarantee their orders are added to the order book, securing maker fee benefits.

By understanding and properly applying Post-Only, traders can optimize trading costs and improve risk management. For professional traders with a focus on cost efficiency, Post-Only becomes an essential part of their trading strategy.