Understanding Trading Fees
How Fees Impact Profits
Trading fees can severely eat into your profits, especially for day traders or those executing high-frequency trades with tight margins. A common mistake is calculating profit solely by the difference in asset price, forgetting that you pay a percentage to the exchange on both the way in and the way out.
Your Net Profit is calculated by taking your final payout (Net Proceeds) and subtracting your true initial investment (Total Cost Basis).
Maker vs Taker Fees
Most crypto exchanges use a Maker/Taker fee model. Makers provide liquidity to the order book (e.g., placing a limit order) and usually enjoy lower fees. Takers consume liquidity (e.g., placing a market order) and usually pay higher fees.
- Binance: 0.1% standard (can be lower with BNB)
- Coinbase Advanced: ~0.4% maker / 0.6% taker
- Traditional Brokers (Stock): Often $0 commission, though regulatory fees (like SEC fees) may still apply on sales.