Streamlining Cryptocurrency Trading: Minimize Fees with Maker-Taker Strategy

In cryptocurrency trading, there are two order types: maker and taker, which significantly impact a trader’s profitability. Even when opening the same position, the final profit or loss can vary greatly depending on which order type is chosen. Here, we will explain the basics of maker orders and practical ways to utilize them effectively.

Taker Orders: Immediate Approach Using Market Liquidity

Taker orders match immediately with existing orders on the order book, executing the position right away. This method is useful when traders have an urgent need to enter or exit a position.

Since this order type “takes” liquidity from the market, trading fees are set higher. In return for the certainty and speed of execution, traders pay relatively higher fees, such as 0.055%. Essentially, traders prioritize speed and accept the associated costs.

Maker Orders: Supplying Liquidity to the Market and Earning Lower Fees

On the other hand, maker orders involve placing orders on the order book and waiting for other traders’ taker orders to match. This strategy “creates new liquidity” in the market, which is rewarded with lower fees, such as 0.02%.

Traders placing maker orders help narrow bid-ask spreads and improve overall market trading efficiency. By setting limit orders at favorable prices and patiently waiting for execution, traders benefit from reduced fees.

Comparison Table of Order Types: Fees and Features

Note: The listed fees apply to perpetual and futures trading. For details on all trading products, please refer to the official website.

Actual Profit and Loss Simulation: Comparing Two Strategies

Let’s compare using the same scenario in BTCUSDT perpetual contracts: buy at 60,000 USDT, sell at 61,000 USDT, with a contract size of 2 BTC.

Trader Using Maker Orders

Opening fee: 2 × 60,000 × 0.02% = 24 USDT

Closing fee: 2 × 61,000 × 0.02% = 24.4 USDT

Profit before fees: 2 × (61,000 - 60,000) = 2,000 USDT

Final profit: 2,000 - 24 - 24.4 = 1,951.6 USDT

Trader Using Taker Orders

Opening fee: 2 × 60,000 × 0.055% = 66 USDT

Closing fee: 2 × 61,000 × 0.055% = 67.1 USDT

Profit before fees: 2,000 USDT

Final profit: 2,000 - 66 - 67.1 = 1,866.9 USDT

The Impact of Fee Differences on Profit

While both strategies yield a profit of around 2,000 USDT, the maker order trader ends up with approximately 1,951.6 USDT, whereas the taker order trader ends with about 1,866.9 USDT. The difference is roughly 85 USDT.

Though this may seem small per trade, executing 100 trades per month amplifies the difference to over 8,500 USDT annually. Therefore, choosing between maker and taker orders can significantly influence your yearly profitability.

Practical Steps to Effectively Place Maker Orders

To maximize the benefits of maker orders, consider the following approaches:

1. Use Limit Orders: Avoid market orders; place limit orders outside the current best bid/ask prices.
2. Enable Post-Only Mode: This setting prevents orders from executing immediately, reducing accidental taker trades.
3. Set Prices Strategically: Place buy orders below the current best bid and sell orders above the best ask.
4. Practice Patience: Be willing to wait for your orders to fill, adopting a strategic patience approach.

If a limit order unexpectedly executes immediately, having post-only enabled will automatically cancel it, preventing it from being treated as a taker order.

Summary: Fee Awareness as a Key to Trading Strategy

Understanding the difference between maker and taker orders and choosing the appropriate order type based on your trading style is essential for optimizing profits. If quick market response is needed, a taker order is suitable; for long-term, planned trading, a lower-fee maker order is advantageous. Making informed choices can greatly influence your overall trading profitability.