What are maker and taker fees for crypto traders?

All cryptocurrency exchanges charge fees to traders who sell or buy coins. Commissions can vary from one platform to another and, for various reasons, even within the same exchange. Among the various factors that influence the amount of the commissions is the type of orders placed.

 

One of the possible classifications is the one between maker and taker commissions.

 

What is meant by maker and taker?

Makers “make a market” for other traders, i.e. they bring liquidity into an exchange.

For example, a limit order for a stock trade is usually not filled immediately. It is triggered or, better, crossed only when the market reaches its price level. Therefore, a trader placing an order like this “generates liquidity in a market” for other traders.

 

Taker is instead the term used to indicate those traders who are looking for trading options to be seized immediately. In doing so, takers remove liquidity from the market, “taking” available orders which are filled immediately.

 

How do maker and taker fees differ?

Generally, taker fees are slightly higher than maker fees, to incentivize the latter. This is because an order that adds liquidity to the book, until picked up by another trader, helps “make the market”.

 

Liquidity represents a positive value for a market: exchanges and stock exchanges have an interest in attracting makers to their platforms to generate liquidity and reduce the spread. Liquidity on an exchange indicates the extent of market interest based on the number of active traders and overall trading volume. Lower maker fees therefore incentivize the creation of a market.

 

From 6 December, in line with the above, commissions for ‘market makers’ will be halved on The Rock Trading.

Current fees of 0.2% will be lowered to 0.1%, with a 50% discount.

 

The commissions for those in the position of taker will instead remain unchanged, with an effective benefit for the whole market!

 

Are you ready? Get to the top of crypto: start now!