Sometimes a considerable portion of the trading profits drains into multiplied fees for your positions. Of course, the platform gives you access to markets, so it’s reasonable that they charge for the service.
But, is it possible to trade without fees? The answer is – YES.
Why Did We Do It?
Cryptocurrencies are redistributing the power that’s historically been held by financial institutions to the people. This is our contribution, we wanted to simplify access to open finance for everyone. By canceling all trading fees on CEX.IO Broker we give our clients more freedom to take advantage of the market opportunities.
In the following sections, we will explain in detail how the fees work and explore the opportunities that are going to be easily accessible for traders in the future. So read on, we have a lot to share.
How Do Trading Fees Work?
Before we move on, let’s explore the role of fees in margin trading.
Usually, to open, close, and maintain positions on margin trading platforms, traders need to pay fees. These fees can cut the profits, and even turn trading ROI negative. How? Let’s look closer at the example.
Say you want to open a short position on the trading asset X being sure in the upcoming downtrend. However, you don’t know exactly when it happens. So you open the position and keep paying maintenance (rollover) fees while waiting for the position to become profitable. The longer you wait, the more chances these fees will eat up your profit or even make it negative.
You want to do scalping trading — open and close positions frequently to fix a profit. And of course, you have to pay both opening and closing fees for every position. These fees reduce your profit or, in the worst case, make it negative.
No matter whether you make money or lose — you need to pay these fees.
Here’s what happens when you don’t have to pay any fees:
- You put to trade the exact amount of money you operate. Nothing is cut off to cover the fees. It means more trading capital, more potential return.
- You don’t have to calculate the trading cost, i.e. deduct fees from deposit/profit. It makes it easier to estimate the efficiency of your trading strategy.
- Keep your position open as long as you want. You don’t need to worry that maintenance fees would eat your balance while your position is open.
This means you focus only on your strategy and get greater exposure to market opportunities.
No Trading Fees at CEX.IO Broker. What’s The Catch?
Some platforms position themselves as commission-free, while still charging certain fees in a less transparent way. Such fees are usually not very easy to spot. But you can bump into them later and get disappointed. Some caveats worth mentioning:
1. Spread widening. Some platforms recoup fees by incorporating them into the spread. This means you pay a bit more than the prevailing price when you open a Long position and receive a little less when you Short. Even if the difference is small but in significant amounts, it is quite noticeable.
2. Platform fees. It can be monthly, quarterly, or annual fees just to have an account with the platform. This fee is charged regardless of whether or no you use the platform.
3. Data/Subscriptions fees. Those can be fees for receiving certain market data or research. Sometimes, it can be offered for free, and fees would apply later upon a trial period, which oftentimes are forgotten to cancel. 😬
These are not the only cases, there are many other ways platforms charge unaware traders attracted by the no-fees policy.
The main point is trading may look free on the surface, but digging deeper, you are likely to find yourself paying some commission.
That’s not our case. CEX.IO is different and now we’ll explain why.
How Does Commission-free Margin Trading Work on CEX.IO Broker?
We won’t play Robin Hood here (no pun intended). Every business is created to bring revenue. And commissions are the most popular way to do so. Yet, there are other ways.
So, how are we going to earn if we cancel all commissions?
Well, CEX.IO is in a special position.
We’re an ecosystem of interconnected products and services. With the single CEX.IO account, you can access all services without taking any additional actions. It’s like you’ve got a Gmail account for accessing all Google services at once.
When you’re signed in to your CEX.IO account, switching between all of the services we offer takes just a couple of clicks.
By pooling more volumes as a result of continuous no-fee trading, we are stimulating activity on other services within the ecosystem.
Let’s take a closer look:
A customer signs up for CEX.IO and funds his account. They can buy crypto in the Instant Buy service or exchange on spot trading on CEX.IO Exchange.
Having this crypto on the CEX.IO Wallet, you can transfer them instantly and for free to CEX.IO Broker.
So the customer places an order on CEX.IO Broker. Thanks to the aggregated liquidity, this order is routed to and filled at the biggest spot trading platforms, including CEX.IO Exchange.
In this case, CEX.IO Ecosystem benefits:
- Gets more volume on CEX.IO Exchange, which means increased activity
- Increased activity helps win more users and get better positions in rankings
- Higher rankings attract more new customers
- More new customers —> more funds flow in CEX.IO Wallet
- More funds flow in CEX.IO Wallet —> more users on other services (staking, savings, loan)
So commission-free CEX.IO Broker allows us to introduce more services of the ecosystem to a wider audience, potentially stimulate more activity there, and generate profit. That’s it.
With CEX.IO, you find yourself in a safe place where you can use the newest services through a series of our products seamlessly connected between each other and the outer world (DeFi, crypto markets, and conventional finance). By canceling all fees on CEX.IO Broker:
- Our clients get the freedom to access more opportunities on the market
- We stimulate the overall CEX.IO ecosystem growth
- Markets benefit — by taking our clients’ orders to other spot exchanges, we increase the volume there. This in turn is good for those exchanges’ clients, and thus the entire market.
We operate based on the economic rationale. Zero commission on CEX.IO Broker is good for clients, markets, and good for us.
We believe everyone can master the financial markets. And with the democratized approach to these markets, lives become easier.
Stay tuned to hear more updates from us. We’ve got pretty awesome plans for the nearest future.
We’re developing fintech and blockchain products since the beginning of the industry. Here, we’re happy to share over a decade-long experience, expertise, as well as news and updates of the CEX.IO Ecosystem products.