How to calculate LBank contract handling fee

LBank's contract handling fee depends on the contract type, trading volume, and maker/taker status, ranging from 0.02% to 0.03% for futures contracts in Tier 2 (10,001-50,000 contracts).

Nov 26, 2024 at 12:42 pm

How to Calculate LBank Contract Handling Fee

Definition of Contract Handling Fee

A contract handling fee is a charge levied by a cryptocurrency exchange for facilitating the execution of futures contracts. It typically covers the costs incurred by the exchange in providing the infrastructure and support for contract trading.

Components of LBank Contract Handling Fee

The LBank contract handling fee consists of two components:

1. Maker Fee:

   • Maker fees are charged to users who create new orders that add liquidity to the order book.
   • Makers contribute to price discovery and market efficiency.
   • The maker fee is typically lower than the taker fee.

2. Taker Fee:

   • Taker fees are charged to users who fill existing orders on the order book.
   • Takers remove liquidity from the market.
   • The taker fee is usually higher than the maker fee.

Calculation of LBank Contract Handling Fee

The LBank contract handling fee is calculated as a percentage of the contract value, excluding the notional value of the base currency. The fee schedule varies depending on the contract type and trading volume tier.

Step 1: Determine Contract Type

The first step in calculating the contract handling fee is to determine the type of contract being traded. LBank offers various types of contracts, such as:

• Futures contracts
• Perpetual contracts
• Options contracts

Each contract type has its unique fee structure.

Step 2: Identify Trading Volume Tier

LBank uses a tiered fee structure based on trading volume. The higher the trading volume, the lower the handling fee. The trading volume tiers are as follows:

• Tier 1: 0-10,000 contracts
• Tier 2: 10,001-50,000 contracts
• Tier 3: 50,001-100,000 contracts
• Tier 4: Above 100,000 contracts

Step 3: Find Applicable Fee Rate

Once the contract type and trading volume tier are identified, the applicable fee rate can be found from the LBank fee schedule. The fee schedule provides the maker and taker fee rates for each combination of contract type and trading volume tier.

Step 4: Calculate Handling Fee

To calculate the handling fee for a specific trade, multiply the contract value by the applicable fee rate. The fee is charged in the quote currency of the contract.

Example Calculation

Consider a 10 ETH futures contract traded in Tier 2 (10,001-50,000 contracts). The current ETH price is $1,500.

• Contract Value = 10 ETH x $1,500 = $15,000
• Maker Fee Rate (Tier 2) = 0.02%
• Taker Fee Rate (Tier 2) = 0.03%
• Maker Fee = $15,000 x 0.02% = $0.3
• Taker Fee = $15,000 x 0.03% = $0.45