Order Cost refers to the total margin required to open a position. Depending on the direction of your position, either long or short, different formulas are used to calculate the order cost for limit and market orders.
Long Position
Formula for Calculating Order Cost:
Order Cost = Initial Margin + Buy Fee + Sell Fee
- Initial Margin = (Order Price × Order Quantity) / Leverage
- Buy Fee = Order Quantity × Order Price × Taker Fee Rate
- Sell Fee = Order Quantity × Liquidation Price × Taker Fee Rate
- Long Position Liquidation Price = Order Price × (Leverage − 1) / Leverage
Example:
Trader A opens a long position of 1 BTC with 10x leverage at a price of 50,000 USDT.
The order cost is calculated as follows:
- Initial Margin = (50,000 × 1) / 10 = 5,000 USDT
- Buy Fee = 1 × 50,000 × 0.055% = 27.5 USDT
- Sell Fee = 1 × 50,000 × (10 − 1) / 10 × 0.055% = 24.75 USDT
Therefore, the Order Cost = 5,000 + 27.5 + 24.75 = 5,052.25 USDT.
To determine the position size based on the order cost, the following formula can be used:
For Trader A:
- Position Size = Order Cost × Leverage / [Order Price × (0.0011 × Leverage + 0.99945)]
Calculating this:
- Position Size = 5,052.25 × 10 / [50,000 × (0.0011 × 10 + 0.99945)]
- Position Size = 1 BTC
Short Position
Formula for Calculating Order Cost:
Order Cost = Initial Margin + Buy Fee + Sell Fee
- Initial Margin = (Order Price × Order Quantity) / Leverage
- Buy Fee = Order Quantity × Order Price × Taker Fee Rate
- Sell Fee = Order Quantity × Liquidation Price × Taker Fee Rate
- Short Position Liquidation Price = Order Price × (Leverage + 1) / Leverage
Example:
Trader B opens a short position of 1 BTC with 10x leverage at a price of 55,000 USDT.
The order cost is calculated as follows:
- Initial Margin = (55,000 × 1) / 10 = 5,500 USDT
- Buy Fee = 1 × 55,000 × 0.055% = 30.25 USDT
- Sell Fee = 1 × 55,000 × (10 + 1) / 10 × 0.055% = 33.275 USDT
Therefore, the Order Cost = 5,500 + 30.25 + 33.275 = 5,563.525 USDT.
To determine the position size based on the order cost, the following formula can be used:
For Trader B:
- Position Size = Order Cost × Leverage / [Order Price × (0.0011 × Leverage + 1.00055)]
Calculating this:
- Position Size = 5,563.525 × 10 / [55,000 × (0.0011 × 10 + 1.00055)]
- Position Size = 1 BTC