Introduction
A Post Only order is a limit order that ensures you receive maker rebates while never crossing the spread on crypto perpetual exchanges. This order type protects traders from accidentally becoming takers, which would incur fees instead of earning them. Understanding this mechanism helps active traders optimize their cost structure. Many perpetual futures platforms offer this option, and it has become essential for arbitrageurs and market makers.
Key Takeaways
Post Only orders guarantee maker fee status if filled. The order either sits on the order book or cancels completely. This order type prevents unintended taker fees during volatile market conditions. Traders use Post Only to provide liquidity while protecting against adverse fills. It works best when you want to influence the order book without risking execution at unfavorable prices.
What is a Post Only Order
A Post Only order is a conditional limit order that automatically cancels if it would immediately match against an existing order. The order only executes if it can sit on the bid or ask side of the order book. This mechanism ensures the order generates maker rebates rather than taker fees. According to Investopedia, maker orders provide liquidity while taker orders remove it, and Post Only enforces this distinction automatically.
Why Post Only Orders Matter
Post Only orders matter because they prevent costly mistakes during fast-moving markets. Without this feature, a trader placing a limit order might accidentally become a taker when the spread narrows. Market makers rely on Post Only to maintain their inventory without paying taker fees. High-frequency traders use this order type to position orders ahead of large market moves. The difference between maker and taker fees can range from 0.01% to 0.05% per trade, which compounds significantly at scale.
How Post Only Orders Work
The mechanics follow a simple decision tree. When you submit a Post Only order, the exchange checks whether your price level has existing orders. If no opposing orders exist at your price, the order posts to the book and earns maker rebates. If your price would cross an existing order, the exchange cancels the order immediately. The formula governing this behavior is straightforward: Order Status = (Price Level Available?) → Yes: Post to Book, Earn Maker Fee / No: Cancel Order, Zero Fee. For example, if BTC perpetual trades at $40,000 bid and $40,010 ask, a Post Only buy at $40,005 posts to the order book since it sits above the bid but below the ask. A Post Only buy at $40,015 cancels because it would cross the ask price and become a taker. According to the Bis website on market structure, liquidity provision mechanisms like Post Only orders help maintain tighter spreads by incentivizing limit orders over market orders.
Used in Practice
Traders apply Post Only orders in several common scenarios. Arbitrageurs use them to capture basis between spot and futures markets without paying taker fees. Funding rate hunters place Post Only orders to earn the funding spread while maintaining exchange rebates. Grid trading bots implement Post Only to ensure each leg earns maker fees rather than paying them. Portfolio managers use this order type when rebalancing large positions to avoid market impact. Example scenario: You expect funding to pay 0.01% every 8 hours on an ETH perpetual. You place a Post Only buy order at the current bid. The order posts, you become a maker, and when funding settles, your long position earns the payment minus your exchange fees.
Risks and Limitations
Post Only orders carry execution risk. Your order may never fill if the market moves away from your price level. This creates opportunity cost during trending markets. Slippage on partial fills can still occur if your order matches multiple incoming orders. Not all exchanges offer Post Only functionality, limiting its use on smaller platforms. Some exchanges charge a small cancellation fee if you post and cancel frequently, which penalizes order book farming strategies.
Post Only vs. Standard Limit Orders
Standard limit orders can become market orders when prices move favorably, filling you immediately as a taker. Post Only orders sacrifice this possibility to guarantee maker status. Limit orders offer higher fill rates but expose you to taker fees. Post Only orders offer lower fill rates but guarantee rebates. The choice depends on your strategy: if you need guaranteed execution, use standard limits; if you prioritize fee optimization, use Post Only. Post Only vs. Reduce-Only Orders: Reduce-only orders guarantee your position size decreases but never increases, useful for stop-loss placement. Post Only orders control fee status but do not limit position direction. Reduce-only prevents adding to losing positions; Post Only prevents accidental market orders.
What to Watch
Monitor exchange fee schedules as maker rebates change periodically. Watch spread width before placing Post Only orders, as wide spreads reduce the likelihood of fills. Track your fill rates when using this order type extensively. Some exchanges offer Post Only with Time-in-Force options, which affect how long your order remains eligible. Understand each exchange’s specific implementation, as some platforms call this feature by different names.
FAQ
What happens if my Post Only order partially fills?
Your remaining order quantity stays on the book as a maker order. Partial fills do not convert you to taker status for the unfilled portion.
Can I use Post Only orders with stop-loss triggers?
Some exchanges allow Post Only stop orders, but the trigger mechanism may override the Post Only guarantee depending on execution logic.
Do Post Only orders work during pre-market or auction sessions?
This varies by exchange. Some platforms extend Post Only functionality to all trading sessions; others limit it to continuous trading only.
Is Post Only profitable for retail traders?
Post Only benefits traders who can wait for ideal prices and trade frequently enough to offset opportunity costs with cumulative maker rebates.
How do exchanges detect Post Only abuse?
Exchanges monitor order-to-trade ratios and cancel frequencies. Excessive posting followed by immediate cancellations violates most exchange policies and may result in fee penalties or account restrictions.
Can Post Only orders have expiration times?
Yes, most exchanges allow you to set Time-in-Force parameters like GTC (Good Till Canceled) or IOC (Immediate or Cancel) combined with Post Only functionality.
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