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Assume that one side of the position will be charged the TAKER fee (0.25%), and the other will be charged the MAKER fee (0.10%).

I have tried using this formula, but when selling at the break even price, the result does not sum to zero.

Marking up the MAKER & TAKER fees:

Break Even Price = Buy Price * 1.0035.
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Sell Rate = (Fee + 1) / ((1 / Buy Rate) - (1 / Buy Rate) * Fee)

Key:

  • Sell rate = Minimum sell rate required to break even
  • Buy Rate = The rate that your initial trade is made at
  • Fee = The fee that binance charges (generally 0.1 if your starting out and don't pay fees in BNB)
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  • Perfect, thanks!
    – Sander
    Feb 21 at 23:20
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    By ´Buy Rate´ do you mean the Bitcoin price, or the amount purchased, or the amount divided by the price?
    – Kebman
    Mar 18 at 3:26
  • Let's say the price of one ₿ is $1235. If you bought it for $1000 you'd have (1000-(1000*0.005))/1235 = 0.805668016 units of ₿. But when you put it through the equation, you're left with $1005, which is $5 higher than break even. Am I missing something here?
    – Kebman
    May 28 at 3:53
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There are two issues with your calculation:

  • You are assuming that you are both a Maker and Taker (either maker when buying and Taker when selling, or taker on the buy and maker on the sell) which could be true, but might not always be the case
  • You are calculating both fees based on the Buy Price (which is not accurate because the corresponding maker/taker fee is a percentage of the selling price too).

Your calculation only makes sense if you are being charged both maker- and taker-fees and your buyPrice == sellPrice. Which will never be 0 because if you are buying and selling at the same price then you lose out on the fees.

If both orders were maker orders your calculation would be:
Break Even would be when: (sellPrice * (1 + maker)) - (buyPrice * (1 + maker)) = 0

If the buy was a maker order and the sell a taker order:
Break Even would be when: (sellPrice * (1 + taker)) - (buyPrice * (1 + maker)) = 0

You would need to extend these scenarios for all 4 possible permutations of the maker/taker fees.

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  • 1
    But how do you know the sellPrice in advance?
    – Kebman
    Mar 18 at 3:28
  • You don't need to know sellPrice necessarily but you can use the equation to calculate the sellPrice. Using algebra you transform the equations to be in the form "sellPrice = ..."
    – YinGroen
    Apr 25 at 7:59
  • How do you do that?
    – Kebman
    May 28 at 3:32

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