Post-Only Orders: A Spot & Futures Platform Comparison.

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1. Post-Only Orders: A Spot & Futures Platform Comparison

Introduction

For newcomers to the world of cryptocurrency trading, navigating the various order types and platform features can be daunting. One often-overlooked, yet crucial, order type is the “post-only” order. This article will delve into post-only orders, explaining their function and benefits, and comparing how they are implemented across popular cryptocurrency exchanges, both for spot trading and futures trading. We’ll focus on platforms like Binance and Bybit, highlighting what beginners should prioritize when choosing a platform and utilizing this valuable tool. Understanding post-only orders can significantly improve your trading efficiency and reduce costs, especially when dealing with market making or high-frequency trading strategies. We will also incorporate links to resources from cryptofutures.trading to expand your knowledge of futures trading concepts.

What are Post-Only Orders?

A post-only order is a type of limit order that *guarantees* your order will be placed as a maker order, meaning it will be added to the order book, providing liquidity, rather than immediately matching with an existing order (becoming a taker). Standard limit orders can sometimes execute as taker orders if they match an existing order in the book at the specified price or better. This can be undesirable if you are intentionally trying to provide liquidity and avoid paying taker fees.

**Maker vs. Taker:** Understanding the difference between maker and taker fees is essential. Makers *add* liquidity to the order book, while takers *remove* liquidity. Exchanges typically charge lower fees to makers to incentivize liquidity provision and higher fees to takers.
**Why Use Post-Only Orders?**

   * **Lower Fees:** The primary benefit is reduced trading fees. Maker fees are almost always lower than taker fees.
   * **Liquidity Provision:**  Contributes to a healthier order book and tighter spreads.
   * **Avoid Slippage:**  By not immediately executing, post-only orders help avoid slippage, especially in volatile markets.  Slippage is the difference between the expected price of a trade and the actual price at which it executes.
   * **Market Making:**  Post-only orders are fundamental to market making strategies, where traders profit from the spread between the bid and ask prices.

Post-Only Orders on Spot Exchanges

Let’s examine how post-only orders are implemented on spot exchanges, focusing on Binance and Bybit.

**Binance:** Binance offers a “Post Only” checkbox within its trading interface. When checked, the system will only submit your limit order as a maker order. If your limit order would have executed as a taker, the order will simply not be placed. This is a straightforward implementation. Binance’s fee structure is tiered based on 30-day trading volume, and maker rebates are available for high-volume traders.
**Bybit:** Bybit also provides a “Post Only” option alongside its limit order placement. Similar to Binance, this ensures your order is always submitted as a maker. Bybit’s fee structure is competitive, and they frequently offer promotions that can further reduce maker fees.

Post-Only Orders on Futures Exchanges

Futures exchanges are where post-only orders become even more critical, particularly for algorithmic trading and sophisticated strategies. Let’s compare Binance Futures and Bybit Futures.

**Binance Futures:** Binance Futures provides a dedicated "Post Only" option. It also offers advanced order types like "Reduce Only" which is the opposite of Post Only – it ensures your order *only* executes against existing orders, never adding to the order book. Binance Futures’ fee structure is tiered based on both trading volume and VIP level. Understanding risk management strategies for crypto futures trading (see [1]) is particularly important when trading futures due to the leverage involved.
**Bybit Futures:** Bybit Futures also offers a "Post Only" order type. Bybit is known for its user-friendly interface, making it relatively easy for beginners to utilize post-only orders. It also provides features like copy trading and automated trading bots, which can leverage post-only orders for more efficient execution. Bybit offers perpetual contracts, such as ETH/USDT perpetual futures (see [2]), which are popular among traders.

Platform Comparison Table

Here's a comparative table summarizing the key features of post-only orders on these platforms:

Platform	Spot Trading	Futures Trading	Post-Only Implementation	Fee Structure	User Interface
Binance	Yes	Yes	Checkbox option; straightforward.	Tiered based on 30-day volume; maker rebates.	Generally user-friendly, can be complex for beginners.	Bybit	Yes	Yes	Checkbox option; similar to Binance.	Competitive; frequent promotions.	Very user-friendly, especially for beginners.	Binance Futures	N/A	Yes	Dedicated "Post Only" & "Reduce Only" options.	Tiered based on volume & VIP level.	More advanced features, potentially overwhelming for new users.	Bybit Futures	N/A	Yes	"Post Only" option available.	Competitive.	User-friendly, with features like copy trading.

Advanced Considerations

**Order Book Dynamics:** The effectiveness of post-only orders depends on the liquidity of the asset you are trading. In highly liquid markets, your order is more likely to be filled quickly. In illiquid markets, your order might sit in the order book for a considerable time.
**Price Impact:** Large post-only orders can still have a price impact, especially in less liquid markets. Your order might move the price slightly as it is added to the order book.
**Hidden Orders:** Some platforms offer "hidden orders" which mask the size of your order from the public order book. While these don’t directly relate to post-only orders, they can be used in conjunction to minimize price impact.
**Iceberg Orders:** Iceberg orders are another advanced order type that displays only a portion of your total order size to the market, replenishing it as it is filled. This can also be combined with post-only orders for large-volume trading.
**Renko Charts:** For futures traders, visualizing price movements using Renko charts (see [3]) can help identify potential entry and exit points, and inform the placement of post-only orders.

Beginner Prioritization: What to Focus On

For beginners, the following aspects are crucial when utilizing post-only orders:

**Start Small:** Begin with small order sizes to understand how the feature works and its impact on your trades.
**Understand Fees:** Carefully review the fee structure of the exchange you are using. Calculate the potential savings from using post-only orders.
**Liquidity:** Trade assets with sufficient liquidity to ensure your orders are filled in a reasonable timeframe.
**Order Placement:** Place your limit orders at reasonable prices, slightly above the current ask price (for buy orders) or below the current bid price (for sell orders).
**Patience:** Post-only orders might not be filled immediately. Be patient and allow the market to come to your price.
**Risk Management:** Always implement proper risk management techniques, especially when trading futures. Use stop-loss orders to limit potential losses.
**Platform Tutorials:** Utilize the tutorials and documentation provided by the exchange to learn more about post-only orders and other advanced features.

Specific Platform Recommendations for Beginners

**Bybit:** Bybit is generally recommended for beginners due to its intuitive interface and comprehensive learning resources. Its user-friendly design makes it easier to navigate and understand the different order types.
**Binance:** While Binance offers a wider range of features, its complexity can be overwhelming for newcomers. However, its extensive documentation and large user base provide ample support.

Conclusion

Post-only orders are a powerful tool for cryptocurrency traders, offering potential cost savings and improved execution quality. While the concept is relatively simple, understanding its nuances and how it's implemented across different platforms is crucial. By focusing on the key considerations outlined in this article, beginners can effectively utilize post-only orders to enhance their trading strategies and navigate the dynamic world of cryptocurrency trading. Remember to prioritize risk management and continuous learning to maximize your success.

Recommended Futures Trading Platforms

Platform	Futures Features	Register
Binance Futures	Leverage up to 125x, USDⓈ-M contracts	Register now
Bitget Futures	USDT-margined contracts	Open account

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