Most people learn to read a chart long before they learn what it costs to act on one. That order is backwards, because the cost of trading is the one number in your results that is certain. Direction is a probability. The toll is not.
Three separate charges apply to a single trade, and they are commonly lumped together as "fees" even though they behave differently and are reduced in different ways.
The three costs
- Spread: the gap between the best bid and the best ask. If the book is 100.00 bid and 100.05 ask, you buy at 100.05 and could immediately sell only at 100.00. That 0.05 is a cost you paid the moment you entered.
- Slippage: the difference between the price you expected and the price you actually got. It appears when your order is larger than the size resting at the best price, or when the market moves between your decision and your fill.
- Commission or fee: what the venue charges you, usually quoted in basis points of notional. One basis point is 0.01 percent.
Why they are not the same thing
The distinction matters because each responds to different action. A fee is a published rate and is the same whether you trade one unit or one hundred. Spread is a property of the market at that instant, and widens in thin conditions. Slippage is a property of your order relative to the book, and grows with your size.
A trader who blames "fees" for poor results and negotiates a fee rebate, while continuing to send large market orders into a thin book, has optimised the smallest of the three.
Maker and taker
Venues usually charge two rates. A taker order removes liquidity that was resting on the book and pays the higher rate. A maker order rests on the book and waits, paying a lower rate or occasionally receiving a rebate.
The trade-off is not free. A resting order is a promise to trade at your price if the market comes to you, which means you are most likely to be filled precisely when the market has decided to go the other way. Choosing maker execution lowers the fee and introduces a different cost, called adverse selection.
Funding: the fourth cost on a perpetual
Perpetual futures add a charge that spot markets do not have. Funding is paid periodically between longs and shorts to keep the contract near spot. It is not charged per trade, it is charged per unit of time held, so it scales with duration rather than with frequency.
This makes funding the one cost that punishes patience instead of activity. A strategy holding a crowded position for weeks can pay more in funding than it ever paid in fees.
How to measure what you were actually charged
Record two prices for every trade: the price at the moment you decided, and the price you were filled at. The difference is your realised slippage, and it is the only honest way to know it. A venue reports its fee; nobody reports your slippage back to you.
This project logs both sides for its own paper agents, which is why it can publish a full decomposition rather than an estimate. Every closed trade is broken into gross profit and loss, fee, slippage and funding.