How fees and funding work on xtree

Why this lesson exists

Trading costs money. On xtree, the cost has two pieces: a flat fee on every fill, and a funding payment on positions held across 8-hour windows. Both get deducted from your equity automatically, and both are small enough per trade that traders ignore them — and then lose 2–3% of an evaluation to them over a month.

This lesson lays out the numbers and works through a 24-hour holding cost so you know what a typical position actually costs.

The flat fee — 5 bps on notional, each side

Every fill on xtree costs 5 basis points (0.05%) on notional. The fee applies on entry and on exit, so a round-trip is 10 bps total.

Two things to internalise:

1. The fee is on notional, not on margin. Leverage doesn't scale the fee, but the size you're trading does.
2. Both sides of the trade get charged. Open + close = two fees. There's no "free close" if you cancel a position quickly.

Quick examples on Standard ₹5L:

• Open xBTC long, ₹2,00,000 notional. Entry fee: ₹2,00,000 × 0.0005 = ₹100.
• Close it. Exit fee: ₹100 (the close notional is roughly the same, assuming small price movement).
• Round-trip cost: ₹200.

Take 20 round-trips at this size in a week and you've paid ₹4,000 in fees alone — 0.8% of a ₹5L account.

Why leverage doesn't change the fee

A common mistake: assuming that 10× leverage charges 10× the fee. It doesn't.

• 1× long, ₹1,00,000 notional, ₹1,00,000 margin → fee = ₹50.
• 10× long, ₹1,00,000 notional, ₹10,000 margin → fee = ₹50.

Same notional, same fee. The fee follows the exposure you put on, not the margin you put up. The fee row in the OrderPanel confirmation modal shows the exact rupee figure — read it before every submit, especially while you're calibrating.

This is the same reason your P&L on a leveraged trade is (exit − entry) × size, not (exit − entry) × size × leverage. The maths is in P&L mechanics.

Funding — passthrough from Lighter

xtree displays live Lighter.xyz perp prices. The funding rate on those perps is passed through to your account directly — when Lighter charges or credits funding on a perp, xtree applies the equivalent rupee amount to your equity.

Funding settles every 8 hours, at roughly 00:00, 08:00, and 16:00 UTC (so 05:30, 13:30, and 21:30 IST). At each window:

• If the perp trades above the underlying, longs pay shorts. Your equity ticks down if you're long.
• If the perp trades below the underlying, shorts pay longs. Your equity ticks up if you're long.

Funding rates are usually small — a few bps per 8-hour window on liquid markets like xBTC and xETH. They can spike during volatile periods, especially around major macro news, and they can run as high as 50–100 bps per window on thinner books. Always check the current funding rate before holding a position into a window.

The mechanics of funding are covered in What is a perp; this lesson is about its cost on xtree specifically.

Worked example — 24-hour holding cost

You open a long position on xBTC at ₹85,00,000. Position size 0.012 BTC. Notional: ₹1,02,000 — roughly ₹1L, which is a clean number to reason about.

Entry fee. 5 bps on ₹1,02,000 = ₹51.

Funding over 24 hours. Assume a typical 0.01% / 8 hours funding rate on the long side (you pay).

• Each 8-hour window: ₹1,02,000 × 0.0001 = ₹10.20.
• Three windows in 24 hours: ₹30.60.

Exit fee. Assume the price has moved to ₹85,30,000 — close notional is now ₹85,30,000 × 0.012 = ₹1,02,360. Fee: 5 bps on ₹1,02,360 ≈ ₹51.

Total cost over 24 hours: ₹51 + ₹30.60 + ₹51 = roughly ₹133.

For context, the gross P&L on that move was (₹85.3L − ₹85L) × 0.012 = ₹3,600. So the net realised P&L is approximately ₹3,467.

Two takeaways:

1. On a small position held for a day, fees and funding take roughly 4% of the gross P&L. Not negligible.
2. On a losing or break-even trade, fees and funding are pure cost — they don't disappear because the trade didn't work.

How fees affect your edge

This is where it gets uncomfortable for short-timeframe traders.

A scalper running 30 round-trips a day at ₹1L notional pays ₹3,000/day in fees alone. In a 20-day month, that's ₹60,000 — a 12% drag on a ₹5L account before the strategy has made or lost a single rupee on price moves.

The implication: scalping strategies need a higher hit rate or a wider average R-multiple than swing strategies to net the same return. That's not a reason to avoid scalping — it's a reason to compute the fee drag before you backtest, not after.

The framing is the same one in R:R and expectancy, with fees treated as a fixed cost per attempt.

Where to see the fee on a trade

Two places:

1. OrderPanel confirmation modal — the "Est. fee" row shows the exact rupee fee for this entry.
2. TradeBottomTabs → History tab — each closed trade row shows Realised P&L net of fees. The summary row at the top of the History tab shows lifetime fees paid for the challenge.

Make a habit of glancing at the History summary once a week. If your fee number is climbing faster than your Realised P&L, your strategy isn't paying for its own friction.

Funding rate visibility

Funding rate isn't shown in OrderPanel directly. It's a Lighter market property, and xtree picks it up automatically. If you want to check it before holding a position into a window, the cleanest signal is the perp price drift vs the underlying — covered in What is a perp.

For most traders, the practical rule is: if you're scalping (in and out within an hour), funding is invisible. If you're swinging (overnight or multi-day), budget 5–20 bps of cost per 8-hour window held and double-check during high-volatility periods.

Recap

• Fee: 5 bps on notional, on every fill. Both entry and exit. Round-trip = 10 bps.
• Fee is on notional, not margin — leverage doesn't scale it.
• Funding: passed through from Lighter, settles every 8 hours, applied directly to equity.
• A 24-hour ₹1L notional position costs roughly ₹130 (₹100 fees + ₹30 funding) at typical rates.
• Glance at the History summary weekly — your strategy has to pay for its own friction.

You've finished the platform tutorials module. Next, jump into Risk Management to size your trades, or into Strategy Primers to start building setups.

Test yourself

You've reached the end of Module 4. Next: Position sizing — the most important habit for surviving an evaluation.