Maker Taker
Maker taker is a fee model where liquidity providers (makers) and liquidity removers (takers) pay different fees or receive rebates depending on order type.
Definition
Maker taker is a fee model in which participants who add liquidity to the order book (makers) and those who remove liquidity (takers) are charged differently.
How it works
• Makers place resting limit orders that add liquidity. They may pay lower fees or even receive rebates.
• Takers execute immediately against existing orders (often via market orders). They typically pay higher fees.
Why it matters
Maker taker pricing changes your optimal execution strategy. Using limit orders can reduce fees and sometimes improve fills, while market orders may be more expensive both in spread and fees.
Common pitfalls
Assuming a limit order makes you a maker: You are only a maker if your order rests and gets hit. A limit order that crosses the spread behaves like a taker.
Ignoring net cost: Lower fees do not always mean lower total cost if you miss fills or get adverse selection.