Maker-Taker Fee Model

Definition

Maker-Taker Fee Model in plain English

When you place an order to trade, you're either ADDING an offer that sits and waits for someone (a "maker," because you're making liquidity available) or GRABBING an offer that's already sitting there (a "taker," because you're taking liquidity away). In the maker-taker model, the exchange pays makers a small reward (a rebate) for posting patient orders and charges takers a small fee for the convenience of trading instantly — a bit like a store paying you a little to stock its shelves but charging shoppers who buy off them. This nudges people to post orders and keep the market full of choices. Some venues flip it ("inverted"), paying takers and charging makers instead, to attract fast, aggressive traders.

Learn these first

• Tick Size

Related Market Microstructure terms

• Access Rule (Rule 610)
• Call Auction
• Continuous Auction
• Iceberg Order
• Limit Order
• Limit Order Book (LOB)
• Order Protection Rule (Rule 611)
• Order-Driven Market
• Price Priority
• Price-Time Priority