Maker-Taker Fees

maker-takerexchange fee modelmaker rebate

The maker-taker fee model charges different fees based on whether an order adds liquidity (maker, typically receives a rebate) or removes liquidity (taker, pays a fee), incentivizing limit order placement.

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Analysis from Apr 18, 2026

What Are Maker-Taker Fees?

The maker-taker fee model is a pricing structure used by most stock and options exchanges that differentiates fees based on whether an order adds or removes liquidity. Orders that add liquidity to the order book (makers) receive a small rebate per share, while orders that remove liquidity (takers) pay a fee. This asymmetric pricing incentivizes market participants to post limit orders, deepening the order book and improving market quality.

The model has become the dominant exchange pricing structure since the early 2000s and plays a significant role in how orders are routed, how market makers operate, and how trading strategies are designed.

How the Model Works

When a trader places a limit buy order below the current ask, it rests in the order book and adds liquidity. If another trader later places a market sell order that executes against this limit buy, the limit order trader (maker) receives a rebate and the market order trader (taker) pays a fee.

The exchange collects the taker fee and pays out the maker rebate, keeping the difference as revenue. Typical US equity exchange rebates are around $0.002-$0.003 per share for makers, and fees are around $0.003 per share for takers. The exchange earns the net difference (roughly $0.001 per share) plus revenue from data and technology services.

Impact on Market Behavior

The maker-taker model has significantly influenced market structure. Market makers design their strategies around capturing rebates, posting limit orders aggressively to earn the maker rebate on as many shares as possible. At scale, rebate revenue is substantial.

Rebate arbitrage strategies attempt to profit primarily from exchange rebates rather than from price movements. A trader might post aggressive limit orders that are likely to fill, earning the rebate on each fill, and then immediately hedge the position on another venue.

Order routing decisions are influenced by maker-taker economics. Brokers may route orders to exchanges offering the highest rebates, which creates potential conflicts with best execution obligations. Regulators have questioned whether rebates distort order routing and market quality.

Some exchanges use an inverted model (taker-maker) that pays rebates to takers and charges makers, attracting different types of trading activity and creating competitive diversity among venues.

Frequently Asked Questions

▶What is the difference between a maker and a taker?

A maker adds liquidity to the order book by placing a limit order that does not immediately execute. For example, a buy limit order below the current ask or a sell limit order above the current bid rests in the book and "makes" liquidity for others. A taker removes liquidity by placing an order that immediately executes against resting orders. A market order or an aggressive limit order that crosses the spread is a taker. Makers are rewarded with a rebate because they provide the liquidity that makes markets function. Takers pay a fee because they consume that liquidity.

▶How much are maker-taker fees?

Typical maker-taker fees on US equity exchanges range from -$0.002 to -$0.0035 per share for makers (negative means a rebate) and $0.0025 to $0.0035 per share for takers (positive means a fee). The total exchange fee for a round trip (one maker, one taker) is typically less than a penny per share. These fees are set by each exchange and are regulated by the SEC, which caps access fees at $0.003 per share. While these amounts seem tiny, they are significant for high-volume traders and market makers. Some exchanges use an inverted model, paying rebates to takers instead.

▶How do maker-taker fees affect trading strategies?

Maker-taker fees directly impact the profitability of high-frequency and active trading strategies. Strategies that primarily use limit orders (market making, passive execution) benefit from rebates, which can be a meaningful source of revenue at high volumes. Strategies that use market orders or aggressive limits (momentum, execution algorithms) pay taker fees, which add to transaction costs. Some traders structure their orders specifically to capture rebates. The fee model can also influence order routing decisions; brokers may route to exchanges offering the best rebates, which may not always align with the best execution for the client.

Maker-Taker Fees is one of the signals monitored daily in the AI-driven macro analysis on Convex Trading. The platform synthesises data across monetary policy, credit, sentiment, and on-chain metrics to generate actionable trade recommendations. Create a free account to build your own signal layer and see how Maker-Taker Fees is influencing current positions.

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