Confusion/Misunderstanding over the maker/taker fee mechanism
What’s the difference between maker and taker fees?
Makers are market makers who provide two-sided markets, and takers as those trading the prices set by market makers. Takers setting market orders pay taker fees, while makers setting limit orders may receive payment for filling orders.
What is a maker fee?
A maker fee is when you create an order on the order book (this could be a buy or a sell) and someone else completes it, therefore you pay no fees and get the amount paid. The one that completed your order pays the fee.
What is market maker and taker?
Market makers and market takers both work together to create a functioning trading market. The market maker is someone who creates the buy or sell order for execution, while the taker is the party that immediately buys or fills that order. The operations of market makers and takers are accounted for in an order book.
Why are taker fees higher?
On the flip side, “takers” take liquidity. That is, they place market orders to immediately buy / sell orders sitting on the books. For that, takers pay a higher fee than makers (in some markets).
How do maker-taker fees work?
As noted above, the maker-taker fee model is a pricing structure in which a market generally pays its members a per share rebate to provide (i.e., “make”) liquidity in securities and assesses on them a fee to remove (i.e., “take”) liquidity.
How are maker-taker fees calculated?
Maker fees start at 0.16% on standard trading pairs, 0.20% on stablecoin and FX pairs and can go as low as 0.00% depending on your current 30-day trading volume. A trade order gets the taker fee if the trade order is matched immediately against an order already on the order book, which removes liquidity.
What is better post only or allow taker?
When placing a limit order, you can check the box “Post only” so that your order is only ever a maker. This will allow you to avoid fees. If you choose the option “Post only”, your order will only ever be a maker. It will never match with any orders already on the book and will wait for a taker to match with it.
Why are Coinbase pro fees lower?
Coinbase Pro costs less and uses a maker-taker approach. According to Coinbase, “the base rate for all purchase and sale transactions in the U.S. is 4%.” But, the fees vary based on your location and payment method. Coinbase charges a higher amount for either a flat rate or variable fee based on the payment method.
What is maker and taker Luno?
On makers and takers
The Luno Exchange uses the popular maker-taker fee model. Market makers are traders who place some of their local currency on the Luno Exchange, which will be used to buy Bitcoin at some time in the future.
How much is the taker fee in Luno?
On 5 October, Luno will reduce taker fees for all our Exchange customers. The highest fees that any customer will pay will be 0.10%, while the lowest will be 0.03%. This is a huge reduction of over 90% – down from a rate of 1% for those in the highest band.
How do you make profit on Luno?
Luno Savings
You can earn up to 1.5%* interest on your Bitcoin**, 2% on your Ethereum**, and up to 7.6%* interest on your USDC** per annum. Your earnings are then paid in crypto directly into your correlating Savings Wallet on the first day of each month.