What copy trading actually costs

Whether copying a trader can work does not depend on whether he makes money. It depends on how much he earns per dollar of business versus how much you pay per dollar of business. Put those two numbers together and most "star traders" are eliminated immediately.

First, what you pay

Copying means crossing the spread — the signal arrives and you must get in now, so you are always the taker. At a perp taker fee of 4.5 bps, every $1M of volume costs you $450.

Then, what he earns per $1M

His type	Earned per $1M	Minus your taker fee	What is left
Low-frequency directional (the hunter)	$21K	− $450	97.9%
High-frequency maker (the toll booth)	$443	− $450	-1.7%

That line is not a judgement call — those two numbers draw it. The hunter's margin is thick enough to survive a few seconds of delay and one extra fee. The maker's margin is thinner than your fee: it is gone before you are filled.

Three structural obstacles on top of the fee

1. You end up on the other side of his trade. Most of a maker's volume is filled passively. When you cross the spread to trade, the edge he earns is the edge you pay. That is not following him, it is being his counterparty.
2. Fees point opposite ways. He receives a maker rebate; you pay a taker fee. Same trade, opposite ends of the fee schedule.
3. It is physically out of reach. These accounts do tens of thousands of fills a day, often a few hundred dollars of notional each. Replicating that is not a copy-trading product, it is building a market-making desk.

Our conclusion

⚠️ To be precise about the boundary: this is a calculation about whether costs can be covered — a necessary condition for copy trading, not a sufficient one. "The margin survives the fee" does not mean copying will make money; that needs separate testing, and this article makes no such claim.