Quote from: oyvinds on March 16, 2014, 08:45:58 AM

Quote from: wilfried on March 16, 2014, 08:07:53 AM

new add fee=??? --> is it a fee for placing a limit order? is it applied to market orders too? or is it a fee for a buy beeing executed?
new remove fee=??? --> is it a fee for canceling a limit order? or is it a fee for a sell beeing executed?

In simple terms:

You hit an order that's in the book then you are the "maker" (you made the trade happen).

Your resting order gets hit then you are the "taker" (you just sat there waiting).

It doesn't matter if you hit a limit order already in the book with a market order or FOK order or a limit placed below last price. If you "make the move" then you're the maker.

If you place a limit order and I fok it you pay 0.2% and I pay 0.04%.

There is still no fee for canceling orders.

My impression is that the exchanges who use this system do it to encourage active trading and volatility. BFX point of view is that a trade where one pays 0.2% and another 0.04% gives them 0.24% profit - which is the same as if they charged both parties 0.12%. I guess how much you end up paying with this new fee structure depends on your trading pattern.

I think this is a good thing. However.. Huobi has zero fees for trading. That would be better. (The obvious question is: How do they make money, then?)

Definitions:

1) a market maker is anybody adding liquidity to the order book:

a)If the ticker price is 633 and I insert a limit BTC selling order at 635 I provide liquidity to the order book ( with my action I created an extra ask line on the order book)

b)If the ticker price is 633 and I insert a limit BTC buying order at 631 I provide liquidity to the order book ( with my action I created an extra bid line on the order book)

2) a market taker is anybody subtracting liquidity to the order book:

c) If the ticker price is 633 and I insert a limit BTC selling order at 633 (or lower) or a market order, I take away liquidity from the order book ( with my action I took away 1/or more bid lines from the order book)

d) If the ticker price is 633 and I insert a limit BTC buying order at 633 (or higher) or a market order, I take away liquidity from the order book ( with my action I took away 1/or more ask lines on the order book)

With this move Bitfinex basically wants to reward people adding liquidity to our order book as this will provide a better service to our customers by avoiding slippage in case of big orders (liquidity a.k.a as thickness is good, slippage is bad).

The amount of fees generated by a trade (the sum of the 2 legs of a trade) remains unchanged for Bitfinex.

We are not making more money on trading fees, we are just rewarding book "thickeners" at the expenses of book "thinners".

It must be noticed that the worse case fee scenario at Bitfinex represent the best case fee scenario on other platforms (0.20%).

We also believe that the market will find a balance and not decrease the volume of trades, but only time will tell if we were right in our assumption or not.

This new fee introduction has therefore to be considered an experiment that will only be confirmed if we see that no major negative changes will occur to our volume (we believe it will actually be beneficial as it will attract more traders and therefore generate more volume, but we are not 100% certain of that).

I hope this helps

Have a good day

Giancarlo
Bitfinex Team