What is a market maker and a market taker? The trading minute

By: rootdata|2026/08/01 05:09:08

To each their own, the cows will be well guarded. On an order book, there are only two ways to participate in the market. Either you place an order that waits its turn, or you take what is already displayed. The market maker places limit orders that remain pending and provide liquidity: they make the market. The market taker, on the other hand, sends an order that executes immediately against what is already posted, usually a market order.

This distinction, very technical in appearance, has a concrete consequence: it determines the fees that each trader pays on their preferred order book.

The price of impatience

Most major platforms apply a differentiated fee schedule to reward those who provide liquidity through a limit order that waits on the book, and charge a bit more to those who consume it immediately.

At Kraken, a MiCA-approved platform accessible to the French, the principle is documented in black and white in its official fee schedule: on Kraken Pro, the base tier applies 0.40% for a maker order versus 0.80% for a taker order, a gap that narrows as monthly volume increases, approaching 0% maker fees for the largest accounts.

At Coinbase Advanced, the logic is identical. A market order or a limit order executed immediately pays the taker rate, while a limit order placed below the market price and executed later pays the maker rate, which is lower, as specified in Coinbase's official documentation. On both platforms, the bill rises mechanically for those who want to be served immediately.

This hierarchy is not just a matter of accounting. It also shapes the behavior of active traders. An individual who multiplies back-and-forth market orders ends up, without even realizing it, paying an invisible tax on each of their transactions, while someone who places their orders in advance is almost compensated for their patience.

Why this detail deserves your attention

An individual trader does not need to become a professional market maker to take advantage of this mechanism. It is enough to understand that an order posted in advance, rather than an order placed in haste, often costs less and sometimes executes at a better price. On a volatile asset or in times of stress, the difference between the two behaviors can represent much more than just a few basis points in fees, especially when accumulated over dozens of transactions per month.

The reflex to adopt is summed up in a simple rule: plan your entries and exits with limit orders whenever timing is not critical, and reserve market orders for situations where getting out quickly matters more than getting out well. Exchanges do not make this distinction by chance. They reflect a market reality where providing liquidity benefits everyone, while consuming it in urgency comes at a cost, literally. This same planning reflex also applies to managing the risk/reward ratio of a position.

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