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What Fees are Generated in Binance Futures Trading?

2024-05-29

There are three types of applicable fees in Binance Futures trading:

1. Commission Fee (Incurred every time an order is executed)
2. Funding Fee (Incurred depending on the trade position at the time of settlement)
3. Insurance Clearance Fee (Incurred when a position is forcibly liquidated)

Read below to learn more about the different fees involved.

1. Commission fee

The commission fee incurred on your order can vary depending on several factors:

Pay-out TimingWhether your position was partially or fully executed
VIP LevelsYour participation and progress in our exclusive programs
Maker & Taker

Whether your order remains on the order book as a maker or is immediately matched as a taker.

Maker: Orders that provide market liquidity. If you place an order that is not immediately executed and remains on the order book, commonly seen in limit orders, you are acting as a maker. This action means you are adding liquidity to the market.

Taker: Orders that remove market liquidity. If you place an order that is immediately executed, like a market order, you are acting as a taker. These orders remove liquidity from the order book.

BNB DiscountReceive a 10% discount on standard trading fees when you use BNB to pay for commission fees on the Binance Futures platform for USDⓈ-M Futures. Please ensure that you have transferred a sufficient BNB balance to your USDⓈ-M Futures Wallet, otherwise the system will automatically deduct USDT for the fees and you will not be entitled to the discount.

Commission fee calculation

Depending on the contract type, commission fees will differ in calculation:

For USDⓈ-Margined:
Commission Fee = Notional Value * Fee Rate
Notional Value = Number of Contracts * Trade Price

For COIN-Margin:
Commission Fee = Notional Value * Fee Rate
Notional Value = (Number of Contracts* Contract Size) / Trade Price

For more details on commission fees calculations, see the Binance Futures Fee Structure & Calculations page.

2. Funding fee

Funding rates are exchanged between long- and short-position holders periodically, to help converge perpetual contracts’ prices to underlying asset prices. Through the funding rate, traders are incentivized to hold positions that help align the contract price closer to the spot price.

Please note that Binance only helps facilitate the exchange of funding amounts between long- and short-position holders. Binance does not charge any service fees.

Additionally, the funding rate can serve as an indicator of market sentiment. A positive funding rate typically indicates that long positions are stronger in the market, while a negative funding rate suggests that short positions are more dominant.

Funding fee settlement time

Typically settling every 8 hours, the frequency of funding fee settlements varies depending on the cryptocurrency pair held.

Funding payments with a settlement frequency of every 8 hours start at 00:00 (UTC), 08:00 (UTC), and 16:00 (UTC).

Funding payments with a settlement frequency of every 4 hours start at 00:00 (UTC), 04:00 (UTC), 08:00 (UTC), 12:00 (UTC), 16:00 (UTC), and 20:00 (UTC).

Funding fee payments and receipts

Traders will be charged or receive the funding fee only if they hold a position in the corresponding direction at the time the fee is charged. If there is no position held at that time, no funding fee will be paid or received.

The flow of funding fee payments and receipts is as follow:

Funding Rate > 0Funding Rate
Long positionPaying funding feeReceiving funding fee
Short positionReceiving funding feePaying funding fee

Funding fee calculation

For USDⓈ-Margined:
Funding Fee = Notional Value * Fee Rate
Notional Value = Number of Contracts * Trade Price

For COIN-Margin:
Funding Fee = Notional Value * Fee Rate
Notional Value = (Number of Contracts* Contract Size) / Trade Price

For more details on futures funding rates, please visit the Introduction to Binance Futures Funding Rates page.

Funding rate arbitrage and bot

  • Funding rate arbitrage
    Funding rate arbitrage is a delta neutral strategy that enables traders to hedge their positions in the futures market by taking an opposite position for the same trading pair in the spot market. Any loss originating from a price movement on the futures market will be offset by a profit on the spot market (and vice versa), which allows traders to earn funding fees without closing any of their positions.

    For more details on funding rate arbitrage, please visit this Contract Information page.
  • Funding Rate Arbitrage Bot
    The Binance Funding Rate Arbitrage Bot is an innovative tool designed for traders to engage in arbitrage strategies between perpetual futures contracts and their spot equivalents. The Bot leverages the funding rate mechanism by hedging their futures position with a spot position to collect the funding fee.

    For more details, please visit What is the Binance Funding Rate Arbitrage Bot and How Does It Work?
3. Insurance Clearance fee

If your wallet balance is insufficient to meet the margin requirements, the system will automatically close your position through forced liquidation. This can lead to the loss of all the capital invested in the position. For more details, please visit Binance Futures Liquidation Protocols.

When a position is liquidated, a portion of the assets that have been made available to maintain the position will be deducted and paid to Binance as the Insurance Clearance Fee, unless the position is a bankrupt position following liquidation. The transfer will be marked as ''Insurance Clearance'' in your transaction history.

You can check the rates of Insurance clearance fees on the Trading Rules page.

Insurance Clearance fee calculation

For USDⓈ-Margined:
Insurance Clearance Fee = Notional Value * Fee Rate
Notional Value = Number of Contracts * Trade Price

For more details, please visit How to Calculate Liquidation Price of USDⓈ-M Futures Contracts.

For COIN-Margin:
Insurance Clearance Fee = Notional Value * Fee Rate
Notional Value = (Number of Contracts* Contract Size) / Trade Price

For more details, please visit How to Calculate Liquidation Price of Coin-M Futures Contracts.