Introduction
Post-only orders on Arbitrum Futures let traders place limit orders that never take liquidity, ensuring maker fee rebates on every execution. Traders use this order type when they want to earn rebates instead of paying taker fees while maintaining control over execution price. Understanding when to deploy post-only orders directly impacts your net trading costs and strategy effectiveness.
Key Takeaways
- Post-only orders guarantee maker rebate by never crossing the spread
- Orders immediately cancel if they would otherwise fill as takers
- Best suited for high-volume traders prioritizing fee optimization
- Requires understanding of order book dynamics and spread behavior
- Particularly effective on Arbitrum’s low-fee infrastructure
What Is a Post-Only Order
A post-only order is a limit order type that checks whether it would execute against an existing order on the order book. If the order would cross the spread and take liquidity, the system cancels it automatically. If it would rest on the book as a maker, it posts successfully.
The defining characteristic is the maker-or-cancel logic embedded in the order submission. According to Investopedia, maker-taker fee models incentivize liquidity provision by rebating traders who add to the order book. Post-only orders are the execution mechanism that guarantees this status.
On Arbitrum Futures, this order type operates on the same technical framework as Ethereum mainnet futures, but with significantly lower gas costs. This makes frequent order adjustments more economically viable for post-only strategies.
Why Post-Only Orders Matter
The financial difference between maker and taker fees typically ranges from 0.01% to 0.05% per side. For high-frequency traders or market makers executing hundreds of positions daily, this differential compounds into substantial monthly savings. The International Securities Exchange reports that professional traders often structure entire strategies around capturing these rebates.
Beyond cost savings, post-only orders provide execution certainty. Traders know their order either posts at their specified price or does not execute at all. This eliminates the uncertainty of limit orders that might fill at worse prices during volatile conditions.
Arbitrum’s Rollup architecture amplifies these benefits by offering near-instant transaction finality with minimal fees. Traders can adjust post-only orders rapidly without the fee erosion that makes this strategy impractical on higher-cost L1 networks.
How Post-Only Orders Work
The execution logic follows a deterministic flow:
Order Submission Flow
When a trader submits a post-only limit order, the system performs a price comparison check before processing. The logic evaluates whether the order price is better than, equal to, or worse than the best opposite-side order on the book.
Execution Decision Matrix
Price ≥ Best Ask (for buys) → Order posts as maker
Price ≤ Best Bid (for sells) → Order posts as maker
Price crosses spread → Order cancelled immediately
Fee Calculation Model
Net Fee = (Taker Fee Rate × Notional) – Maker Rebate Rate × Notional
For a position with 0.04% taker fee and 0.02% maker rebate: a $10,000 post-only order that fills as maker costs $2 in fees while avoiding the $4 taker cost. The $2 savings per side compounds significantly across high-frequency strategies.
The Arbitrum protocol validates this logic within its sequencer’s transaction ordering, ensuring the check occurs atomically before the order enters the book. This prevents any edge cases where an order might briefly cross before cancellation.
Used in Practice
Market makers primarily use post-only orders to quote continuous two-sided markets. They post bids slightly above and asks slightly below current market prices, earning rebates while providing liquidity. When spreads tighten, their orders naturally rest on the book; when spreads widen, their orders cancel before crossing.
Scalpers employ post-only orders for range-bound strategies. During consolidation phases, they place buy stops and sell limits within the established range, knowing these orders will either earn rebates or not execute. This prevents accidentally paying taker fees during choppy price action.
Arbitrageurs use post-only orders to quote on both sides of spread opportunities without risking automatic execution at unfavorable prices. This preserves capital efficiency while maintaining market presence.
Risks and Limitations
Post-only orders carry execution risk. During fast-moving markets, orders that would have filled as takers simply cancel, leaving traders without positions during the exact moments they intended to enter. This gap between intended and actual execution can significantly impact strategy returns.
The guarantee against taking liquidity requires active order management. Stale post-only orders consume margin without providing execution, reducing capital efficiency. Traders must continuously adjust prices or face systematic underperformance during trending markets.
According to the Bank for International Settlements, order book manipulation risks exist when traders use post-only orders to create false market depth. Legitimate users should ensure their posting behavior genuinely contributes to price discovery rather than artificially inflating order book size.
Post-Only Orders vs Standard Limit Orders
Standard limit orders execute when price reaches the specified level, regardless of whether they cross the spread. A limit buy at $1,050 fills against an existing ask at $1,050, paying taker fees despite the limit order designation. Post-only orders reject this scenario entirely.
The critical difference is the crossing check. Limit orders have price-time priority that can result in taker execution. Post-only orders sacrifice this priority for fee optimization, choosing non-execution over unfavorable fee status.
For traders who rarely adjust orders and accept occasional market orders, standard limits remain appropriate. For those who actively manage positions and prioritize fee efficiency, post-only orders provide measurable cost advantages.
What to Watch
Monitor spread width before placing post-only orders. Spreads of less than one tick make posting difficult without constant adjustment. During low-liquidity periods, the bid-ask spread often exceeds reasonable posting distances.
Track fill rates for post-only orders versus submission attempts. A low fill rate indicates orders consistently cancel, suggesting prices are too aggressive. Conversely, a 100% fill rate may indicate missed rebate opportunities.
Watch margin utilization when orders remain posted. Open post-only orders tie up collateral that could otherwise support additional positions. Balancing order book presence against capital efficiency requires ongoing attention.
Frequently Asked Questions
What happens if a post-only order would cross immediately?
The order cancels instantly with no partial fill. There is no scenario where a post-only order executes at a price that would have crossed the spread.
Can post-only orders be used with stop-loss functionality?
Post-only applies only to the limit order component. Stop triggers execute market orders by design, bypassing the post-only mechanism entirely.
Do post-only orders guarantee better fills than market orders?
Post-only guarantees no worse than the posted price, but guarantees nothing about fill probability. A post-only order that never fills provides no execution at any price.
Are post-only orders available for all trading pairs on Arbitrum Futures?
Post-only availability depends on the specific contract listing. Most perpetual futures contracts support this order type, but verify the order type dropdown before submission.
How quickly does cancellation occur for aggressive post-only orders?
Cancellation occurs within the same block as submission, typically under one second on Arbitrum’s sequencer. There is no queued cancellation—orders either post or cancel immediately.
Does using post-only orders affect my maker rebate qualification?
Yes, every post-only order that fills qualifies for maker rebates. The protocol validates this status at execution time, not order submission time.
Can I convert a standard limit order to post-only after submission?
No. Order type is fixed at submission. You must cancel and resubmit with the post-only designation if you wish to change the order type.
What minimum order size is required for post-only orders?
Minimum sizes match standard order requirements for each contract. There is no additional minimum for using the post-only order type.
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