Market Taker

A market taker is a trader whose order executes immediately against an order already resting in an exchange's order book, thereby removing liquidity from the market. Anyone who sends a market order, or a limit order priced to trade at once, is acting as a taker for that trade. The other side of the trade is the maker, whose earlier resting order supplied the liquidity.

The distinction matters mainly because of fees. Most stock exchanges, futures venues and cryptocurrency exchanges price trading under a maker–taker model in which takers pay a higher fee than makers, and makers are sometimes paid a rebate. "Taker" describes the role in a single trade, not a type of firm: the same trader can be a maker on one order and a taker on the next. It should not be confused with a professional market maker, which is a firm whose business is to quote both sides continuously.

Picture a farmers' market. Stallholders arrive early and lay out produce with price tags; they are the makers, because without them there would be nothing to buy. A shopper who walks up and pays the marked price is the taker: they get what they want straight away, using up stock someone else put out.

Now imagine the market owner charges stallholders a small pitch fee and shoppers a slightly larger entry fee, or even pays the stallholders a little to keep the tables full. That is the maker–taker idea. The venue rewards whoever supplies goods to trade and charges more to whoever wants an immediate deal.

Under a maker–taker schedule, each execution carries two fees: one charged to the maker and one to the taker. The fee is usually a percentage of the trade's notional value on crypto exchanges and a fixed amount per share or contract in equities and futures:

• $F$ is the fee paid (or, if negative, the rebate received).
• $N$ is the notional value of the trade, price multiplied by quantity.
• $r$ is the fee rate that applies to the trader's role: the maker rate or the taker rate.

Worked example, using illustrative rates: an exchange charges makers 0.10% and takers 0.20%. A trader buys 0.5 BTC at a price of 60,000 USDT by sending a market order, so $N = 0.5 \times 60{,}000 = 30{,}000$ USDT. As taker, the fee is $30{,}000 \times 0.002 = 60$ USDT. The seller, whose resting order was filled, pays $30{,}000 \times 0.001 = 30$ USDT. The exchange collects 90 USDT on the one trade. Had the buyer posted a limit order and waited to be filled, it would have paid 30 rather than 60, at the risk of not trading.

Fee rates are typically tiered by 30-day trading volume and sometimes discounted for paying in an exchange's own token, so very active traders and high-frequency trading firms pay far less than occasional retail users. Some venues use the reverse "taker–maker" (or inverted) model, paying takers a rebate to attract marketable order flow.

The maker–taker model was popularised by electronic trading venues in US equities in the late 1990s, which paid rebates to attract displayed limit orders and became widely adopted by exchanges. In the United States, Rule 610 of Regulation NMS, adopted by the Securities and Exchange Commission (SEC) in 2005, capped the fee an exchange may charge to access a protected quotation at $0.003 per share for stocks priced at $1 or more. In September 2024 the SEC adopted amendments lowering that cap to $0.001 per share; the compliance date has since been postponed, and as of 2026 was set for November 2027.

Critics argue that rebates can create conflicts of interest for brokers routing customer orders and add complexity to market structure, while supporters credit them with tighter spreads and deeper displayed liquidity. In crypto markets, maker–taker pricing is set by each exchange with no comparable statutory cap.

In listed stocks and futures, takers include retail investors buying at the offer, funds executing urgent orders and arbitrageurs closing price gaps. In dealer-driven foreign exchange markets the cost of taking is mostly embedded in the FX spread rather than an explicit fee, although multi-dealer electronic platforms also distinguish passive from aggressive orders.

On a centralized exchange the role is explicit on every fill and visible on the trade confirmation. On an order-book decentralized exchange such as dYdX or Hyperliquid the same maker–taker logic applies. On an automated market maker, every swap is effectively a taker trade against a liquidity pool, and the swap fee goes to the liquidity providers who act as makers.

The explicit fee is only one cost. A taker also crosses the bid-ask spread, may suffer slippage on larger orders, and reveals trading interest that faster traders can react to. Against that, taking provides certainty: the trade happens now. Traders choose between the two roles order by order, weighing urgency against cost, and many crypto trading bots and algorithmic trading systems are built largely around capturing maker rebates or avoiding taker fees. Some exchanges' reported trading volume has also been inflated by wash trades run through zero-fee or rebate schemes.

• Investor.gov (SEC): Types of Orders