In the realm of trading, the concepts of maker orders and taker orders play crucial roles, shaping how participants engage with the market. These two terms capture distinct approaches to trading execution and carry implications for transaction fees and market dynamics.

 

 

Taker Orders: Prioritizing Immediacy

Taker orders reflect a sense of urgency and immediacy. A taker order is placed by a trader who seeks to execute their order immediately at the current market price. These orders match with existing orders on the order book, thereby "taking" liquidity from the market. Taker orders facilitate swift entry or exit from positions, making them attractive for those who prioritize speed.

 

Given the immediacy of execution, taker orders may incur slightly higher trading fees (Taker Fee) compared to maker orders to acknowledge the convenience of immediate execution.

 

 

Maker Orders: Nurturing Liquidity

Maker orders, often associated with market makers, contribute to the liquidity and stability of the market. When a trader places a maker order, they provide liquidity by adding their order to the order book, which remains unmatched until another trader's taker order matches with it. These orders have the potential to influence bid-ask spreads, narrowing the price difference between buy and sell orders.

 

As a reward for fostering liquidity, traders who place maker orders typically enjoy reduced trading fees (Maker Fee). Maker orders underscore a patient approach to trading, with participants willing to wait for their order to be matched by a taker.

 

 

The following table outlines the differences between the two (2) types of orders:

 

 

*The provided trading fee information pertains to the non-VIP rates for spot trading. For a comprehensive overview of the fee structure applicable to all trading products on Bybit Europe, kindly refer to here.

 

 

 

Implications for Trading

Let's take a look at the following scenarios, using BTCUSDC trading pair as an example with the following details:

 

 

 

As a Market Taker

Alice puts in a Buy Market order of 1BTC at a market price of 60,000 USDC. Upon placement, the order is immediately filled in the order book with the breakdown of trading fee as follows:

 

Taker’s Trading Fee = Filled Order Quantity x Trading Fee Rate

= 1 x 0.12% = 0.0012BTC

 

 

 

As a Market Maker

On the other hand, if Alice places in a Limit Buy order of the same quantity of 1BTC with the bid price of 60,000 USDC against the market price of 62,000 USDC, with the assumption that it will fall. When the Last Traded Price reaches Alice’s bid price amount, her order will be filled as a maker order, and she’s entitled to a lower fee rate according to her VIP level.

 

Maker’s Trading Fee = Filled Order Quantity x Trading Fee Rate

= 1 x 0.11% = 0.0011BTC

 

 

Based on the example above, we can see that Alice incurs a lower trading fee with a Maker Order, leading to a more favorable net P&L (Profit & Loss). 

 

 

 

This highlights the significance of comprehending trading fees before engaging in trades. Understanding fees ensures that traders can optimize their trading strategies and outcomes by making informed decisions that consider these costs.

 

To execute a maker order, traders should follow these steps:

• Utilize a Limit Order within the order placement zone.

• Select Post-Only

• Set your Limit Order price strategically, aiming for a more advantageous price compared to the present best available price.

For Buy Orders: Opt for a price lower than the best ask prices.

For Sell Orders: Choose a price higher than the best bid prices.

 

 

It's important to note that if your Limit Orders are executed immediately with Post-Only enabled, they will be categorized as taker orders and promptly canceled due to the Post-Only selection.

 

 

 

 

Disclaimer:

— The trading fees used in the examples are given for illustrative purposes only. To view the trading fee rates applicable to your account, please visit your My Fee Rates page.

— Bybit Europe adopts the same maker and taker fee structure for all trading pairs on the platform.