Bybit TradFi: Zero-Fee mode vs. Tight-Spread mode explained
Bybit’s TradFi platform offers you a simplified and flexible way to access trading opportunities for a wide range of traditional financial asset classes. You can trade gold and silver, other commodities, stocks in the form of contracts for difference (CFDs), market indices and forex pairs on TradFi using your Tether (USDT) funds as collateral. TradFi functions as an essential bridge between the worlds of crypto and traditional finance (TradFi), offering you a much higher degree of accessibility compared to trading these assets on stock and commodity exchanges.
To more closely align your platform experience with your trading style and preferences, Bybit has introduced two TradFi account modes: Zero-Fee and Tight-Spread. In this article, we’ll cover the key differences between the two modes, their intended target audiences, trading styles that suit each mode and the ways to switch between them on the Bybit App and Bybit’s desktop trading platform.
Key Takeaways:
Bybit TradFi is a platform that lets you trade traditional financial assets, such as stocks, forex pairs, precious metals, other commodities and market indices using your USDT funds as collateral.
TradFi users now have access to two alternative account modes: Zero-Fee and Tight-Spread.
In Zero-Fee mode, commission fees for TradFi orders are integrated into the spreads you see, with no additional commissions to pay. Meanwhile, Tight-Spread offers narrower spreads but commission fees are calculated and applied separately.
Two account modes on Bybit TradFi for more flexible trading
Bybit TradFi is used extensively by various types of traders — novices and seasoned pros, low-frequency users and day traders, those who prefer simplicity and those who’d like to fine-tune the details of every order.
To better align the platform to your specific trading style, goals and preferences, Bybit now offers two main account modes on TradFi: Zero-Fee and Tight-Spread.
The key difference between the two modes is the way trading costs are structured. Zero-Fee has commissions included in the spread, allowing you to concentrate on executing your trades with maximum simplicity. In contrast, Tight-Spread offers narrower spreads, but involves commission fees added on top of each order. Both of these modes follow standard forex brokerage models widely used in the industry.
By introducing the option to choose between the two modes, Bybit lets you optimize your TradFi strategies for simplicity or precision of execution.
Zero-Fee mode (default) — simple and beginner-friendly
Zero-Fee is the default mode in TradFi. When you trade under this mode, commission fees for each order are included in the spread, and you only see the actual amounts for which you buy or sell assets. There are zero commission fees on top of the spreads you see. Zero-Fee is simple and lets you focus on actual trading execution without having to take any additional fees into account.
Who is Zero-Fee mode for?
This mode is ideal for traders new to TradFi, casual users of the platform and those who typically follow low-frequency strategies. The spreads are somewhat wider than in the alternative mode, but you don’t have to deal with any complex calculations. If you prefer transparent, straightforward all-inclusive pricing, Zero-Fee is the mode for you.
When to choose Zero-Fee mode
Besides simplicity, Zero-Fee mode allows you to start trading immediately, with no additional setup since it’s the default mode in the TradFi interface. You can focus on learning and execution without having to manage commissions. This is ideal for crypto beginners in general, and particularly for anyone new to trading traditional assets on Bybit.
Since traditional asset markets have markedly different dynamics compared to crypto markets, this mode is also valuable for initial experimentation for crypto trading aces who are making their early moves in commodity, stock or forex markets.
Tight-Spread mode — built for precision and efficiency
Tight-Spread mode allows you to access narrower spreads and optimize your TradFi strategy. Commissions are calculated separately, and need to be taken into account before placing an order. This mode offers ultra-tight spreads, providing the opportunity to trade profitably for experienced users and those who prefer high-frequency or high-volume strategies.
In addition to more precise pricing, Tight-Spread also offers faster execution, a critical factor for any trader placing high-frequency trades.
Who is Tight-Spread mode for?
This mode is suitable for active traders, scalpers, high-frequency traders and, in general, anyone seeking more precision for their TradFi strategies. When your strategy requires frequent execution, tighter spreads can help improve your overall profitability substantially, even in the presence of separately calculated commissions.
The tighter spreads may also be a key benefit for those who place huge orders: the bigger the order, the more crucial the spread that you lock in becomes.
Why choose Tight-Spread mode
If you prefer frequent trading, e.g., via following scalping strategies, Tight-Spread might be the optimal mode for you. As a high-frequency trader, you also benefit from the improved execution speed in fast-moving markets.
How to switch between account modes
Your TradFi account must meet two key requirements in order for you to switch from the default Zero-Fee mode to Tight-Spread. First, you’ll need to have a balance of at least 500 USDT in your TradFi account. Second, your account must have no open or pending orders.
Switching via Bybit App
Open Bybit App, tap on Trade in the bottom menu, tap on TradFi in the top menu, tap on Margin Lv and then choose your preferred account mode.
Switching via web
Visit Bybit’s homepage, hover over Trade in the top menu, click on TradFi, click on Account Mode in the trading page’s order panel (around the bottom-right of the screen) and select your preferred account mode.
Why to trade on Bybit TradFi
Bybit TradFi offers you the opportunity to trade a variety of traditional assets using your USDT funds as collateral. Through a single TradFi account, you can access more than 200 trading symbols, including precious metals, other commodities, stocks, forex pairs and market indices. You can leverage your USDT to place orders, with no currency conversions required.
Popular assets — such as gold, silver and top stocks — can be traded on TradFi with flexible cost structures and unmatched accessibility. On traditional stock and commodity exchanges, you may need to satisfy onerous regulatory, residence, investor accreditation and minimum capital requirements.
In contrast, TradFi allows you to access trading opportunities in these assets without these restrictions. All you need to start trading on TradFi is a Bybit account with your identity verified. And with the availability of the Zero-Fee and Tight-Spread account modes, you can fine-tune your TradFi activity to closely match your spread and commission preferences.
Closing thoughts
The two account modes on Bybit TradFi are designed to provide you with a highly customized trading experience.
As a beginning trader or someone placing infrequent trades, you may want to stick to the default Zero-Fee mode. It’s an ideal setting for low-frequency investors, and for users who prefer to experiment with traditional asset trading without the need for complex commission calculations.
On the other hand, if your strategy involves placing frequent trades, Tight-Spread mode might be the better choice. When you try to optimize your in and out moves on the market, the narrow spreads offered in this mode can prove more effective, even if you have to take commission fees into account.
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