The fundamental difference between Maker and Taker orders: their impact on fees and trading strategies

In cryptocurrency trading, the two order types—maker orders and taker orders—significantly impact a trader’s profitability. Understanding these two order types is essential for minimizing fee costs and maximizing overall gains. Let’s take a closer look at the characteristics of each and their practical effects on trading outcomes.

Situations Where Taker Orders Have an Advantage

Traders placing taker orders prioritize executing trades immediately at the current market price. By “absorbing” existing buy or sell orders on the order book, they can quickly enter or exit positions. This immediacy is especially valuable during market volatility or when rapid position adjustments are needed.

However, this convenience comes at a cost. Taker order fees are relatively higher. Since taker orders remove liquidity from the market, they incur higher fee rates compared to maker orders, which add liquidity.

The Advantage of Providing Liquidity with Maker Orders

Conversely, traders submitting maker orders play a role in providing market liquidity. They add new orders to the order book and wait until their orders are matched by taker orders. This act of providing liquidity helps narrow the bid-ask spread and enhances overall market efficiency.

In return for contributing liquidity, maker orders benefit from lower fee rates. This lower fee structure rewards traders who adopt a patient, strategic approach by placing limit orders and waiting for favorable executions.

To summarize the core features:

Maker Orders

• Definition: Added to the order book and executed when matched with taker orders
• Order Type: Limit orders only
• Fees: Approximately 0.02% (for perpetual contracts)
• Characteristics: Liquidity provision, low fees, patience-based

Taker Orders

• Definition: Remove liquidity from the order book and execute immediately
• Order Type: Market orders or limit orders
• Fees: Approximately 0.055% (for perpetual contracts)
• Characteristics: Immediate execution, higher fees, rapid trading

How Fee Differences Impact Profitability: Practical Examples

Let’s examine a concrete trading scenario to see how the fee gap between maker and taker orders affects final profit.

Trading Conditions

Suppose you open a long position of 2 BTC at $60,000 USDT and close it at $61,000 USDT in a perpetual contract. Ignoring fees, your gross profit is $2,000 USDT. However, the way you pay fees—whether as a maker or taker—significantly influences your net profit.

If you use maker orders for both opening and closing:

• Opening: 2 × $60,000 × 0.02% = $24 USDT
• Closing: 2 × $61,000 × 0.02% = $24.40 USDT
• Total fees: $48.40 USDT
• Final profit: $2,000 – $48.40 = $1,951.60 USDT

If you use taker orders for both:

• Opening: 2 × $60,000 × 0.055% = $66 USDT
• Closing: 2 × $61,000 × 0.055% = $67.10 USDT
• Total fees: $133.10 USDT
• Final profit: $2,000 – $133.10 = $1,866.90 USDT

The practical impact of fee differences

Even with the same trade, using maker orders yields approximately $84.70 more in profit than taker orders. Over multiple trades—say, hundreds annually—this difference compounds significantly, making fee savings a crucial factor for active traders.

Strategies to Execute Maker Orders Effectively

To maximize the benefits of maker orders, traders should adopt strategic order placement techniques:

Basic Approach

• Use limit orders within the desired price zone.
• Enable “Post-Only” mode to prevent orders from executing immediately as market orders, ensuring they remain maker orders.

Price Setting Strategies

• Set limit prices more favorable than the current best bid or ask to increase the likelihood of maker execution.
• For buy orders, set slightly below the current best bid.
• For sell orders, set slightly above the current best ask.

Important Considerations

• If a limit order executes immediately, it becomes a taker order, especially if “Post-Only” is not enabled, or if the order is filled at the market price.
• Unexpected market movements can cause your limit order to execute as a taker, so careful price placement and market monitoring are essential.

Understanding the differences between maker and taker orders and choosing the appropriate order type based on your trading strategy and market conditions can lead to more efficient trades and higher profits. Even a single fee rate change can alter your final results, emphasizing the importance of strategic order placement.