Maker, taker, and funding
In short-term trading, fees often decide whether an account grows or shrinks. Which order type you use determines how much you pay.
Learning objective: After this lesson, you can explain why maker and taker orders cost different amounts, and know when a post-only order is worth using.
Someone running an ETF savings plan rarely pays order fees. Someone trading several times a day pays them on every entry and every exit - and that's often exactly where it's decided whether anything is left at the end of the month.
Whether an order costs little or a lot depends on whether it executes instantly or waits first. A taker order takes an existing order out of the order book - that's what happens with market orders and a stop order that triggers. A maker order instead places itself into the order book and waits for someone else to execute it - that's a limit order that doesn't fill immediately. Whoever waits is providing liquidity and usually pays less for it, sometimes nothing at all.
The rates look tiny at first glance. An example with a 2,500 USD position and two example fee tiers, similar to what some providers use:
| Entry | Exit | Total | |
|---|---|---|---|
| Taker / taker (0.06%) | $1.50 | $1.50 | $3.00 |
| Maker / maker (0.02%) | $0.50 | $0.50 | $1.00 |
Two dollars of difference per trade sounds small. At 40 trades a month, that's 80 dollars - purely from the choice of order type, with nothing about the trade itself changing.
A trade has to earn back its fees before any profit exists at all. At two taker fees of 0.06 percent each, the price needs to move at least 0.12 percent in your favor just to break even. Anyone targeting moves of 0.3 to 0.5 percent is giving up a quarter to a third of the possible gain before even starting.
Many platforms offer an option called post-only for limit orders. The order is only accepted if it actually goes into the order book as a maker order - if it would execute immediately instead, it gets rejected rather than accidentally turning into the more expensive taker order. The price for that: sometimes the order never fills, and the price moves on without you. A missed trade costs nothing, though - one that fills at the wrong fee does.
Not every order should be trimmed toward the lower fee. You don't set a stop-loss as a waiting limit order - it should trigger reliably if things go wrong, even if that costs the higher fee. Saving on fees is worth it on entries and profit targets, not on protection against a bigger loss.
Perpetuals have no expiry date. To keep their price close to the price of the underlying market anyway, the long and short sides pay each other a funding rate at fixed intervals - every eight hours on many platforms. If the perpetual's price sits above the underlying market's price, longs usually pay; if it's below, shorts pay. Someone holding a position for a few minutes rarely notices this. Someone holding it for several days should factor funding in as an ongoing cost, not a footnote.
The exact rates for maker, taker, and funding fees vary a lot by provider, trading volume, and product, and change often. The numbers in this example illustrate the order of magnitude, not what you'd actually pay. The binding rates are in your own provider's fee schedule.
Summary
- Fees are calculated on the full position volume, not on the margin.
- Maker orders (waiting limit orders) usually cost less than taker orders (executed instantly).
- For a stop-loss, execution certainty beats saving on fees.
- The shorter and smaller the price target, the bigger the share fees take out of it.
Did you get it?
What is the difference between a maker and a taker?
A maker places an order into the order book and waits; a taker executes immediately against an existing order. Makers usually pay less.
What are trading fees calculated on?
On the full position volume - with leveraged products, that means more than just your own stake.
Should a stop-loss be a limit order?
No. It needs to execute reliably, so the higher taker fee is worth accepting.
Check your understanding
Related
- Order typesStage 1
- Spread, slippage, and liquidityStage 1
- Every fee that eats into your returnStage 1
- PerpetualsTrading
- Matching questions for this stageQuestions