Kraken Perpetual Futures Fees: An In-depth Guide

Kraken is one of the largest and most respected cryptocurrency exchanges globally, renowned for its security, wide range of assets, and robust trading features, including perpetual futures contracts. For any trader, whether seasoned or a beginner, understanding the fee structure is critical to ensuring that you’re trading profitably and efficiently. This comprehensive guide will take a deep dive into Kraken’s perpetual futures fees, how they work, how they compare to other exchanges, and what you need to know to minimize costs.

What Are Perpetual Futures?

Before we explore Kraken's fee structure, let's first break down what perpetual futures are. Unlike traditional futures contracts, perpetual futures have no expiration date. These contracts allow traders to speculate on the price movement of an asset without the need to hold the underlying asset. The contracts are settled in cash rather than the actual commodity or cryptocurrency. This makes perpetual futures especially appealing to traders who want to hedge against market volatility or speculate on price changes without the complications of actual asset ownership.

One critical feature of perpetual futures is the funding rate mechanism, which incentivizes or disincentivizes traders to go long or short depending on market conditions. This rate is exchanged between buyers and sellers at regular intervals, ensuring that the perpetual contract's price closely tracks the spot price of the underlying asset.

Overview of Kraken’s Perpetual Futures Fee Structure

Kraken’s fee structure for perpetual futures is designed to be transparent and competitive. However, as with most exchanges, fees can vary based on your trading volume, the specific futures contracts you are trading, and your role in the transaction—either as a maker or taker. Here’s a breakdown of the different fees involved:

1. Maker and Taker Fees

Kraken charges fees based on whether you are a maker or a taker in the trade:

• Maker Fee: Makers provide liquidity to the order book by placing limit orders. For this, they are rewarded with a lower fee.
• Taker Fee: Takers remove liquidity from the order book by matching with makers' orders, typically through market orders. Taker fees are generally higher.

Kraken uses a volume-based tiered system to determine these fees. As you increase your trading volume over a 30-day period, your fees are reduced. Below is a table detailing the maker and taker fees for different volume tiers:

These fees are relatively competitive compared to other exchanges such as Binance or BitMEX, which also offer perpetual futures contracts.

2. Funding Rate Fees

Funding rates are crucial for maintaining the parity between the price of a perpetual futures contract and the underlying asset's spot price. Depending on the market conditions, funding rates can either be positive or negative:

• Positive Funding Rate: Traders holding long positions pay the funding fee to those holding short positions.
• Negative Funding Rate: Traders holding short positions pay the funding fee to those holding long positions.

The funding rate is not paid to Kraken; instead, it is exchanged between traders on opposite sides of the contract. Kraken publishes the current funding rate for each futures contract on its platform, which fluctuates throughout the day based on market conditions.

3. Settlement Fees

While perpetual futures don’t expire, Kraken charges a small settlement fee when positions are settled in some rare cases. However, most traders are unlikely to encounter this fee due to the nature of perpetual futures, where positions are continuously rolled over rather than settled.

4. Withdrawal and Deposit Fees

For futures trading, Kraken also imposes standard deposit and withdrawal fees. These fees differ depending on the asset you’re transferring into or out of the exchange:

• Cryptocurrency Deposits: Typically free (except for network transaction fees)
• Fiat Deposits and Withdrawals: Vary depending on the method and currency but generally include minimal fees for SEPA, SWIFT, and wire transfers.

It’s important to note that cryptocurrency withdrawals will incur network transaction fees that are external to Kraken’s platform.

Fee Minimization Strategies

High-frequency traders, in particular, can rack up significant fees over time, so it's essential to consider strategies to minimize these costs. Below are some tips:

1. Trade More to Reduce Fees

Kraken offers tiered fee discounts for higher-volume traders. By increasing your trading volume, you can unlock lower maker and taker fees. For example, if you trade over $1,000,000 in perpetual futures contracts within a 30-day window, your taker fee will drop to 0.03%, and your maker fee will fall to 0.01%.

2. Use Limit Orders to Avoid Taker Fees

As mentioned earlier, taker fees are higher than maker fees. If you're not in a rush to execute your trade, placing a limit order will make you a maker, significantly reducing the fee you pay. Over time, this can make a substantial difference in your trading costs.

3. Monitor the Funding Rate

Since funding rates fluctuate, it’s crucial to stay aware of them, especially if you’re holding positions for an extended period. A positive funding rate might eat into your profits if you’re holding a long position. Conversely, a negative funding rate can work in your favor by providing additional income if you’re shorting the market.

4. Time Your Trades Wisely

Certain times of the day may have lower volatility, which could mean lower funding rates. Additionally, trading during these periods might result in better pricing as the market is less erratic.

5. Use Crypto for Deposits and Withdrawals

Fiat deposits and withdrawals often come with additional fees, especially if you are dealing with international banks. Using cryptocurrencies for deposits and withdrawals can help minimize these costs, as Kraken’s deposit fees for crypto are generally zero (aside from blockchain transaction costs).

Comparing Kraken’s Fees to Other Exchanges

When choosing an exchange, fees are one of the most important factors to consider. Kraken’s fee structure is competitive, but it’s helpful to compare it with other leading exchanges in the crypto futures market.

Below is a table comparing Kraken’s fees with other exchanges:

As we can see, Kraken offers lower taker fees than Bybit and BitMEX, while its maker fees are competitive with Binance. Additionally, Kraken’s funding rate mechanism is similar to other exchanges, varying by contract and market conditions. BitMEX stands out by offering a rebate for makers, although it charges a higher taker fee.

Conclusion

Understanding Kraken’s perpetual futures fee structure is essential for traders who want to maximize profitability while minimizing costs. By being strategic—whether through increasing trading volumes, using limit orders, or staying informed about funding rates—traders can significantly reduce the fees they pay on Kraken.

Kraken’s transparent fee structure, coupled with its reputation for security and a wide range of assets, makes it a strong contender for anyone looking to trade perpetual futures contracts. While no exchange is perfect, Kraken’s offering is highly competitive when compared to its peers.

For those serious about cryptocurrency futures trading, keeping track of fees and optimizing your trading approach will be key to long-term success. By understanding how the fee structure works and how it compares with other exchanges, traders can make informed decisions that align with their financial goals.