Taker Fee
A taker fee in cryptocurrency trading is a fee charged by an exchange to traders who remove liquidity from the order book by executing trades that are immediately matched with existing orders. These traders are referred to as ‘takers’ because they ‘take’ liquidity away from the market by completing an order that has already been placed.
Taker fees are often associated with market orders, which are designed to be executed immediately at the best available price. For example, if a trader places a market order to buy or sell cryptocurrency, it will be immediately filled by matching it with the closest available sell or buy orders, removing them from the order book.
Since market orders consume liquidity by filling existing limit orders, the trader placing the market order pays the taker fee. The taker fee percentage varies from exchange to exchange, but it’s usually higher than the maker fee to incentivise adding liquidity to the market. Some exchanges offer tiered fee structures, where high-volume traders may receive discounted taker fees.
Key Takeaway
A taker fee is the cost incurred by traders who execute orders that are immediately matched, removing liquidity from the order book.