Maker Taker Fees: When You Pay and When You Get Paid
What maker taker means
Maker taker is a common fee model in order book markets.
• Makers provide liquidity by placing limit orders that rest in the order book.
• Takers remove liquidity by executing against existing orders.
Fees are often higher for takers and lower for makers. Some venues even pay a maker rebate.
The key rule: resting vs crossing
You are a maker only if your order rests and then gets hit.
If your order executes immediately, you are almost always a taker even if the order type is limit.
Examples
Suppose best bid is 48c and best ask is 52c.
Example A: maker
• You place a buy limit at 50c.
• Your order rests in the book.
• Later a seller hits you and you fill at 50c.
That is maker flow.
Example B: taker (market order)
• You submit a market buy.
• You execute immediately at the ask or worse.
That is taker flow.
Example C: taker (limit that crosses)
• You place a buy limit at 52c.
• It executes immediately at the ask.
This is a limit order, but it behaves like a market order. You are still a taker.
Why maker taker matters in prediction markets
In thin markets, fees can be a meaningful fraction of total cost. Maker taker also interacts with execution quality:
• makers often get better prices but risk not filling
• takers get certainty but pay the spread and higher fees
How to classify your trades correctly
Do not classify trades based on intent. Classify based on what happened.
Log:
• order type (market or limit)
• whether the order rested
• maker taker flag from the venue if provided
• fee charged on each fill
If the venue does not provide the flag, you can infer it:
• if the order executed immediately, treat as taker
• if the order rested and was later filled, treat as maker
How fees interact with effective spread
Execution cost is measured by effective spread. Fees are separate.
To get the number that matters, combine them into all in cost.
All in cost (one way) = effective spread + fees (one way)
Common mistakes
Assuming all limit orders are maker: limit orders that cross are taker.
Ignoring partial fills: maker taker status and fees can differ per fill.
Comparing strategies without fee normalization: maker heavy strategies can look better purely because of lower fees.
Not modeling the cost of missed fills: maker strategies can miss moves. That opportunity cost is real.
Practical takeaway
Maker taker is not a label. It is a realized property of each fill. Track it per fill, add fees to effective spread, and you will avoid the most common cost modeling mistake in prediction markets.
Related
• Market Orders vs Limit Orders: Cost Tradeoffs