Taker-Maker refers to a fee structure and order type classification prevalent in financial markets, particularly cryptocurrency exchanges. It distinguishes between orders that consume existing liquidity (takers) and orders that provide liquidity to the order book (makers). This model incentivizes liquidity provision.
Mechanism
Maker orders are limit orders placed on the order book that do not immediately execute, thereby adding depth and narrowing the bid-ask spread. Taker orders are market orders or limit orders that immediately match with existing orders, removing liquidity. Exchanges often incentivize makers with lower fees or rebates.
Methodology
Trading strategies in crypto, especially high-frequency and algorithmic trading, are significantly influenced by the taker-maker model. Participants optimize order placement to benefit from maker rebates or minimize taker fees, impacting execution costs and overall profitability in spot and institutional options trading. This structure shapes market microstructure and liquidity provision incentives.
Smart Trading routing optimizes for lower fees by algorithmically analyzing venue costs and liquidity to execute trades at the most favorable net price.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
