Maker vs Taker Fees: How They Affect Your Profit

Every trade on an exchange has a cost, and in arbitrage that cost decides whether the trade is worth it. The two most important fees are maker and taker, and almost nobody explains the difference clearly.

Maker and taker in a nutshell

A maker places an order on the order book and waits for someone to accept it. They "create" liquidity. A taker accepts an order that is already on the book, and so "removes" liquidity. A market order and an IOC order executed right away are generally taker orders.

Exchanges usually charge the maker less, because the maker helps the market have liquidity. The taker fee is higher.

An example with numbers

Suppose, purely as an example, a maker fee of 0.02% and a taker fee of 0.06%. On a $1,000 position, entering and exiting as a taker costs 2 × 0.06% = $1.20 per leg. Since arbitrage has two legs, the total cost comes to about $2.40, before spread.

If the net funding per payment is 0.05% ($0.50 on $1,000), you need several payments just to cover the fees. That's why short trades with low funding rarely pay off.

Why bots use taker orders

In arbitrage, both legs need to open at almost the same instant. Waiting for a maker order to be accepted can leave one leg open and the other not, exposing you to the price. So fast execution is usually taker, and the higher cost is the price of safety.

Multi Arbitrage calculates profit with each exchange's fees already included, and only enters when the expected result is worth it. See also how to calculate funding profit.

How to pay lower fees

• Check the fee schedule and the discounts for volume or for holding the exchange's token.
• Prefer coins with higher, steadier funding, so the fees are spread across more payments.
• Avoid entering and exiting the same coin several times.
• Open your account through the exchanges' referral links, which sometimes offer better terms. See which exchanges to use.

Fees and position size

Fees are proportional to the traded value. On a $100 position, a 0.06% fee costs $0.06. On a $10,000 one, it costs $6. What changes is the gain: funding is proportional too. So the net profit percentage is similar, and the dollar amount grows with the position.

Discounts and fee programs

Many exchanges offer a discount to those with more volume, who hold a balance in their own token or who join through a referral program. Check the current rules, because they change often, and never assume the discount applies to futures: often it's for spot only.

Frequently asked questions

Read also

Fundamentals

What Is Spread and Why It Matters in Arbitrage

Spread is the gap between the buy and sell price. See how it affects the cost of entering and exiting an arbitrage trade.

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Funding

How to Calculate Funding Arbitrage Profit

Step-by-step guide to calculating the net result of a funding arbitrage: funding received, fees, spread and opportunity cost, with an example.

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Exchanges

Best Exchanges for Funding Rate Arbitrage

Criteria for choosing exchanges for funding rate arbitrage: liquidity, futures API, fees, margin mode and which exchanges Multi Arbitrage monitors.

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Multi Arbitrage TeamInformational content about crypto arbitrage and futures. Not investment advice.