Maker-Taker vs Taker-Maker
Maker-taker and taker-maker are the two principal fee structures used by U.S. stock exchanges to price access to their liquidity: in a maker-taker model, exchanges pay rebates to limit order providers (makers) and charge fees to marketable order takers, while taker-maker models invert this, charging makers and paying takers, with each structure creating different incentives for order routing and broker behavior.
The economics of exchange fee structures profoundly shape how orders are routed in fragmented U.S. equity markets. In a maker-taker exchange, the limit order provider — the trader who posts a bid or offer that rests in the order book waiting for a counterpart — receives a liquidity rebate when their order is executed, typically expressed in mils (thousandths of a dollar per share). The incoming marketable order that removes that liquidity — the taker — pays an access fee. Standard maker-taker fee rates on major U.S. exchanges cluster around rebates of $0.002 per share and access fees of $0.003 per share, within the cap established by SEC Rule 610.
The rationale for maker-taker pricing is that it subsidizes the provision of displayed liquidity, encouraging market participants to post limit orders and thereby tighten bid-ask spreads. Exchanges compete for the order flow of market makers by offering larger rebates, and they compete for marketable order flow by offering venues where execution against displayed liquidity is available.
Taker-maker models, employed by exchanges including Cboe EDGA and Nasdaq BX, invert the fee structure: they charge a small fee to limit order providers and pay a rebate to incoming marketable orders. The intention is to attract order flow from brokers with large volumes of retail market orders who can generate rebate income by routing to taker-maker venues. In a taker-maker model, the displayed spread may be slightly wider than in a maker-taker venue because the economics of posting limit orders are less favorable.
The debate over these fee structures centers on broker conflicts of interest. A broker routing a retail market order to a taker-maker exchange receives a rebate that may not be passed to the customer. This creates an incentive to route to the venue that maximizes broker revenue rather than the venue offering the best customer execution price. Payment for order flow in the wholesale internalization context is a conceptually related phenomenon: in both cases, broker routing decisions may be influenced by third-party payments rather than pure execution quality. The SEC has examined whether access fee structures should be restructured or whether rebates should be banned to reduce these conflicts.