A maker fee and a taker fee are transaction costs charged by cryptocurrency and stock exchanges when traders execute orders. They are based on whether a trader adds liquidity to the market or removes it. Understanding the difference between the two is important for managing costs and choosing the right trading style.

A maker fee applies when a trader places an order that does not get filled immediately but instead sits in the order book, adding liquidity for others. For example, if you place a limit order to buy Bitcoin at a price lower than the current market rate, your order becomes part of the order book until someone matches it. Because you are “making” liquidity, exchanges often reward this behaviour by charging lower fees or sometimes offering rebates.

A taker fee, on the other hand, applies when a trader places an order that is matched instantly with an existing one in the order book. This action “takes” liquidity out of the market. Market orders are typical examples, as they execute at the best available price immediately. Taker fees are usually higher than maker fees since they reduce liquidity.

In short, maker and taker fees influence how traders approach order types, with cost-conscious traders often preferring strategies that take advantage of lower maker fees.