Introduction
Post-only orders on Sei Futures guarantee your order executes only as a maker, never as a taker. Use this order type when you want to earn rebates instead of paying fees on liquidity provision. This guide covers when post-only orders work best and how to implement them effectively.
Key Takeaways
- Post-only orders protect traders from accidentally paying higher taker fees
- Sei Network offers maker fee rebates for post-only order fills
- This order type requires patience as it only executes when price moves favorably
- Post-only orders suit range-bound markets better than trending conditions
- Understanding fill probability helps optimize post-only order placement
What Is a Post-Only Order on Sei Futures
A post-only order is a conditional instruction that only executes if it would act as a maker order on the order book. According to Investopedia, maker orders add liquidity to exchanges, while taker orders remove it. On Sei Futures, post-only orders ensure you never pay the higher taker fee rate, which typically ranges from 0.05% to 0.10% per trade.
When you submit a post-only buy order at $50,000 and the current ask sits at $50,010, your order rests on the book. If the price drops to $50,000, your order fills at your price and you receive the maker rebate. If prices never reach your level, the order simply expires unfilled.
Why Post-Only Orders Matter on Sei Futures
Sei Network designed its exchange infrastructure specifically for high-frequency trading scenarios. The blockchain’s parallel processing enables sub-second finality, making order book management critical for traders. Post-only orders become essential in this environment because fee structures directly impact profitability.
The Bank for International Settlements (BIS) research on electronic trading confirms that maker-taker fee models influence market quality significantly. On Sei, makers typically earn 0.02% rebates per filled order, creating an incentive structure that rewards liquidity provision over aggressive taking.
Fee Differential Impact
Consider a trader executing 100 contracts daily. Using market orders costs $500 in taker fees. Switching to post-only orders that fill at maker rates generates $200 in rebates while avoiding taker costs. The net difference of $700 daily compounds substantially over monthly trading periods.
How Post-Only Orders Work
Post-only order execution follows a deterministic process defined by these conditions:
Execution Logic
Order Submission → Price Check → Fill Determination
- Condition 1: Post-Only Price ≥ Best Ask (for buys) OR Post-Only Price ≤ Best Bid (for sells)
- Condition 2: If Condition 1 is TRUE → Order rests on book as maker
- Condition 3: If Condition 1 is FALSE → Order rejected OR converted to market order (exchange-specific)
Fill Probability Formula
Fill Probability = 1 – e^(-λ × t)
Where λ represents the arrival rate of counterparty orders and t equals time on book. Higher volatility increases λ, improving fill chances for post-only orders positioned near market prices.
Used in Practice
Traders apply post-only orders effectively in several scenarios on Sei Futures. Mean reversion strategies work well because prices naturally oscillate around fair value. A trader might place a post-only buy order at the 200-period moving average when the price trades below this level.
Grid trading implementations benefit significantly from post-only mechanics. Setting buy orders at predefined grid levels below current price ensures each order becomes a maker if filled. Wikipedia’s explanation of algorithmic trading confirms that grid strategies depend on consistent liquidity provision.
Large institutional orders use post-only to minimize market impact. Breaking a $10 million position into 100 post-only limit orders prevents aggressive price movement that occurs with market orders. Each partial fill accumulates position while maintaining average entry costs closer to mid-price.
Risks and Limitations
Post-only orders carry execution risk that traders must acknowledge. In fast-moving markets, prices may never retrace to your order level, leaving positions unopened during profitable moves. This opportunity cost represents the primary disadvantage compared to immediate execution via market orders.
Sei Futures liquidity varies across contract maturities and trading pairs. Post-only orders in thinly traded markets face extended wait times and potentially zero fills during low-volume sessions. Traders should verify historical fill rates before committing capital to post-only strategies.
Network congestion on Sei blockchain could delay order submission and cancellation. During peak activity, your resting post-only order might become outdated before you can cancel it, exposing you to unfavorable fills or rejected cancellations.
Post-Only Orders vs. Market Orders vs. Limit Orders
Understanding distinctions between order types prevents costly mistakes on Sei Futures.
Post-Only vs. Market Orders
Market orders guarantee execution but guarantee taker fees. Post-only orders guarantee maker fees but guarantee nothing about execution. Market orders suit urgent position entry; post-only suits patient accumulation.
Post-Only vs. Standard Limit Orders
Standard limit orders on some exchanges may take liquidity if prices move immediately. Post-only orders never take; they only provide. This distinction matters when comparing fee structures across trading venues.
Post-Only vs. Time-Weighted Average Price (TWAP) Orders
TWAP algorithms split large orders into time slices and may use market orders to ensure fills. Post-only orders work well as components within TWAP implementations to reduce overall fee burden while maintaining participation rates.
What to Watch
Monitor Sei Futures order book depth before placing post-only orders. Orders placed deep in the book (far from best bid/ask) face lower fill probability but contribute to market depth. Orders near the top of book fill more often but compete directly with existing makers.
Track maker rebate rates as Sei may adjust fee structures based on network activity. Reduced rebates diminish the incentive for post-only orders, potentially shifting strategy toward immediate execution. Check Sei Foundation announcements for fee schedule updates.
Observe correlation between volatility indices and post-only order performance. High-volatility periods increase both fill probability and execution slippage for resting orders. Adjust post-only order sizing during these periods to manage increased price movement risk.
Frequently Asked Questions
What happens if my post-only order would execute at a worse price than the current market?
Most exchanges reject post-only orders that would cross the spread immediately. Your order either remains unfilled or gets cancelled, depending on the platform’s specific rules.
Can post-only orders fill partially?
Yes. If your order size exceeds available liquidity at your price level, partial fills occur. You receive the maker rebate only on the filled portion.
Do post-only orders have time limits?
Post-only orders typically expire based on your specified time-in-force setting, which may include day orders, good-till-cancelled, or specific expiration timestamps.
Are post-only orders available for all Sei Futures contracts?
Post-only functionality depends on the specific exchange listing Sei Futures. Check your trading platform’s order type availability before assuming post-only execution applies universally.
How do I calculate potential savings from post-only orders?
Subtract maker rebate from taker fee, then multiply by expected volume. Example: 0.08% taker fee minus 0.02% rebate equals 0.06% net savings per filled contract.
What market conditions favor post-only orders?
Ranging markets with clear support and resistance levels suit post-only orders best. Trending markets with momentum may cause missed entries if prices move away from order levels faster than retracements occur.
Can I convert a post-only order to a market order?
This depends on your exchange. Some platforms allow order modification, while others require cancellation and resubmission with a different order type.