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Key Takeaways
- Maker-taker pricing credits qualifying liquidity additions and charges qualifying removals under the exchange fee schedule.
- Classify each execution by its add or remove status, then apply its product, capacity and fee code.
- Exchange fees apply to the member firm; the broker’s pricing determines the customer’s charge or credit.
- The worked ten-contract example has a $7.30 difference between the maker credit and taker charge.
- Compare the full execution price, fees and filled quantity when evaluating a route.
What is maker-taker pricing?
Maker-taker pricing is an exchange fee model that pays a rebate for qualifying additions of liquidity and charges a fee for qualifying removals. A resting order adds liquidity when another order trades against it. An incoming marketable order removes liquidity when it executes against resting interest.
The exchange classifies executions and applies the relevant fee code. Order type alone does not determine the result: one limit order can remove liquidity immediately and leave a remainder that later adds liquidity.
Formula
Net exchange cost = removal charges − addition rebates- For the worked options example, multiply the per-contract rate by the number of contracts executed.
- Ten additions at a $0.25 rebate produce a $2.50 member credit; ten removals at a $0.48 fee produce a $4.80 member charge.
- A one-cent option-price change is worth $10 on ten contracts with a 100-share multiplier.
- Apply the fee code for the actual product, capacity and execution.
Maker-taker pricing example: rebate and fee on ten contracts
A trader wants 10 contracts of a penny-quoted equity call listed on Cboe BZX Options. Under the standard customer rates on that fee schedule, posting liquidity in a Penny Program class earns a $0.25 per contract rebate and removing liquidity costs $0.48 per contract.
- Posting and getting filled: 10 × $0.25 = $2.50 credited to the member firm
- Crossing the spread instead: 10 × $0.48 = $4.80 charged to the member firm
- Full swing between the two routes: $2.50 + $4.80 = $7.30
- Value of one penny of option price on the same order: $0.01 × 100 × 10 = $10.00
The member-level fee difference is $7.30. A one-cent option-price change is worth $10 on the same ten contracts. Compare both amounts with the executed quantity and the broker’s customer pricing to evaluate the complete fill.
For ten option contracts with a 100-share multiplier, a one-cent change in quoted option price is worth $10. Compare those amounts alongside the executed quantity and timing, and evaluate routing by the complete execution: price, filled quantity, timing and customer cost.
Exchange charges and customer charges are separate. The broker’s pricing determines whether the customer receives an exchange rebate or pays a passed-through fee.
What determines the maker-taker rate?
Product, customer capacity, order handling and volume tier determine the applicable rate. Equity schedules also distinguish price categories, including securities below $1. Options schedules distinguish Penny Program and non-Penny classes, simple and complex orders, and other execution categories.
Inverted (taker-maker) pricing
Inverted pricing reverses the incentive for the qualifying transactions. EDGX Options credits customer removals and charges market-maker additions, but its schedule also credits customer additions against non-customers. A venue-wide label does not replace the transaction’s fee code.
Maker-taker pricing vs payment for order flow
Maker-taker charges and payment for order flow describe different arrangements. Routing compensation includes wholesaler and options-market arrangements. Use the broker’s routing disclosures to connect the destination with the economics.
Limitations of maker-taker pricing
- Check the fee code on each fill. The $0.25 rebate and $0.48 fee are BZX’s customer Penny Program rates; other products, capacities, tiers and venues set their own, and exchanges revise their schedules.
- Read your broker’s pricing for the customer charge. The rebate and fee settle with the exchange member firm, and the broker’s pricing decides whether any of it reaches the customer.
- A penny of price outweighs the fee here. The $7.30 swing on ten contracts is smaller than the $10 value of one cent of option price on the same order, so judge a route by its fill first.
- Post for the rebate only when you can wait for the fill. The maker rebate pays only when another order trades against the resting one, so a posted order fills late, in part or never when no one meets it.
Bottom line
Maker-taker pricing pays exchange members to post liquidity and charges them to take it, which shapes routing and order-type choices. Read the actual fee code for each execution, keep exchange fees separate from your broker’s charges, and judge a route by fill price, filled quantity and timing as well as fees.
Clear answers
Frequently Asked Questions
Sources and Further Reading
- Cboe BZX Options Exchange Fee Schedule
- Cboe EDGX Options Exchange Fee Schedule
- Cboe Insights: Liquidity Growth on EDGA Maker-Taker Conversion
- Nasdaq: Quantifying the Cost of Maker-Taker Markets
- Nasdaq: Reg NMS for Dummies
How entries are sourced, calculated and updated: editorial methodology.