Ethereum: How are fees charged at Kraken?
When trading on cryptocurrency exchanges like Kraken, one of the most frustrating aspects is the fee structure. The fees charged can eat into your profits, especially for active traders who need to trade frequently. In this article, we’ll look at how fees are charged at Kraken and look at how you can minimize them.
How are fees charged?
Kraken’s fee structure is designed to be transparent and competitive with other exchanges. Fees vary depending on the type of order you place, including:
- Market Order: These orders are placed at the current market price. There is a small “fill cost” for market orders, but this fee is typically minimal.
- Limit Orders: These orders specify a specific buy or sell price. Limit orders charge a “buy” or “sell” fee, depending on whether you are buying or selling.
- Stop-Loss Orders: Like limit orders, stop-loss orders charge a fee to enter or exit a trade.
Are fees deducted from my order volume?
Yes, Kraken deducts the fee from the order volume. This means that if you place a 100% in-train (buy or sell) market order at $10,000 per share, the fee will be deducted from your $1 million trading volume.
Are fees applied separately from your account balance?
Yes, fees are deducted separately from your account balance. When you initiate a trade on Kraken, the transaction fee is applied to the order volume and then deducted from your account balance.
Can I set the currency in which I want my fees to be applied?
Unfortunately, no. Kraken does not allow you to specify the currency in which you want your fees to be charged. The fee calculation always uses your account balance as the default currency.
Minimizing Trading Fees on Kraken
To minimize your trading fees on Kraken:
- Use Limit Orders
: Limit orders are more expensive than market orders, but they help you avoid buying or selling when the price is already set.
- Place large volume trades: Large trades can result in lower fees because the volume is high and the fees are generally lower.
- Avoid Overbought/Oversold Positions: Be wary of overbought (high prices) or oversold (low prices) positions, as these are more likely to attract market makers who charge higher fees.
- Consider Using a Trade Desk: Trading desks like Binance and Huobi offer lower fees for large trades than individual brokerages.
In summary, Kraken’s fees can be frustrating, but if you understand how they are charged and what you can do about them, you can minimize their impact on your trading profits. By using limit orders, trading in large volumes, and keeping an eye on overbought/oversold positions, you can keep more of your hard-earned money in the market.