What Are Trading Fees? Maker vs Taker Explained
Two traders place orders of the exact same size on the exact same exchange, and one pays a noticeably lower fee than the other, simply based on how their order interacted with the market.
What Are Trading Fees?
Trading fees are the charges exchanges apply each time you buy or sell, typically calculated as a percentage of the trade’s total value. Most exchanges use a maker-taker fee model, charging different rates depending on whether your specific order added or removed liquidity from the order book.
What Does Maker vs Taker Actually Mean?
A maker order adds liquidity to the order book, meaning it doesn’t execute immediately but instead sits on the book waiting to be matched, a limit order placed away from the current price is a typical example. A taker order removes liquidity by matching immediately against an existing order already sitting on the book, a market order is a typical example, since it executes right away against whatever’s already available.
Why Do Exchanges Charge Different Rates for Each?
Exchanges generally want to encourage maker orders, since they add depth to the order book, covered in more depth elsewhere in this Academy, benefiting overall market liquidity and making the platform more attractive to other traders. This is why maker fees are typically lower than taker fees, and on some platforms, particularly high-volume trading tiers, makers can even receive a small rebate instead of paying a fee at all.
How Do These Fees Actually Add Up Over Time?
For infrequent, smaller trades, the difference between maker and taker fees might seem minor, but for active traders placing many orders, consistently trading as a taker rather than a maker can meaningfully increase total trading costs over time. Understanding which type of order you’re placing helps you estimate the actual cost of a given strategy more accurately.
Maker vs Taker Fees Compared
| Factor | Maker | Taker |
|---|---|---|
| Order behavior | Adds to the order book, waits to be matched | Matches immediately against existing orders |
| Typical order type | Limit order away from current price | Market order, or limit order that fills instantly |
| Typical fee | Lower, sometimes a rebate | Higher |
Frequently Asked Questions
Is a limit order always a maker order?
Not necessarily, if a limit order is priced such that it matches immediately against an existing order, it’s treated as a taker order despite being a limit order.
Do all exchanges use the maker-taker fee model?
Most major exchanges do, though the exact fee percentages and volume-based discount tiers vary significantly between platforms.
Can trading fees be reduced through higher trading volume?
Many exchanges offer tiered fee discounts based on your trailing trading volume, meaning more active traders often pay progressively lower rates.
Want to understand the bid-ask spread and how it functions as another trading cost beyond explicit fees? Continue learning in the Bitcoin Academy.
Disclaimer: The content provided on this page is for informational and educational purposes only and does not constitute financial or investment advice. Cryptocurrency markets are highly volatile and involve significant risk of loss. Always do your own research and consult a licensed financial advisor before making any investment decisions.