Monkey.com Most exchanges charge a certain handling fee for each spot trading order. The specific commission rates vary depending on whether the trader is a Maker or a Taker.
Taker fee
Takers are traders who reclaim order book liquidity. The trader who submits the market order is the Taker. If the order can be matched immediately with an existing buy or sell order, the trader needs to pay a Taker fee.
Maker fee
A Maker is a trader who provides liquidity to the market by increasing the market depth of the order book. When placing an order in advance in the form of a limit order, the platform will charge a Maker fee.
However, not all limit orders charge Maker fees. For example, traders may be required to pay a Taker fee when their order is immediately matched with an existing order. To ensure that only the Maker fee is paid, traders can choose to submit a limit order so that even if the conditions are met, the order will not be immediately matched with an existing order.
The difference between spot trading and leverage trading
In spot trading, traders use their existing funds to buy cryptocurrencies. After the transaction is executed, the trader fully owns the corresponding assets.
In leveraged trading, traders borrow funds from a third party to purchase cryptocurrency. This allows leveraged traders to buy more cryptocurrencies, or open larger trading positions, and potentially make larger profits. However, leveraged trading is also accompanied by greater risks, because losses will also be magnified with leverage, which may cause leveraged traders to lose more than their initial principal.
Additionally, leveraged traders must always meet their margin requirements to avoid receiving margin calls, which may result in the trader's assets being sold off. Therefore, leverage traders need to pay attention to their transactions at all times. Additionally, leveraged borrowing costs accumulate, so leveraged traders need to trade more frequently and in shorter time periods than spot trading.
The difference between spot trading and contract trading
In spot trading, the cryptocurrency purchased by traders can be delivered immediately, and spot traders have ownership of the underlying assets. Spot traders often wait for the price of a cryptocurrency to rise before taking profits.
In contrast, contract traders do not own the underlying asset but instead hold a contract that represents the value of the cryptocurrency. In a contract transaction, both the buyer and the seller agree to trade a certain amount of cryptocurrency at a specific price in the future, and then lock in this price through the contract until the transaction is completed in the future. When the contract expires on the predetermined date, the buyer and seller then settle.
The main difference between spot trading and contract trading is the use of leverage. Contract trading allows the use of leverage, so contract traders can "use small to gain big" even if their account balance is small.
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