What is maker rebate?
A negative trading fee, paid to the trader rather than charged, offered by some exchanges to high-volume accounts that add liquidity.
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A negative trading fee, paid to the trader rather than charged, offered by some exchanges to high-volume accounts that add liquidity.
The rebate exists because resting orders make a market usable for everyone else. Somebody has to leave a bid and an offer sitting on the book so that the next person to arrive can trade at all, and that person takes on risk to do it. Exchanges pay for the service by inverting the fee at the top of the volume ladder.
Rebates are a professional-tier feature. They appear at the highest rows of a published fee schedule, in market maker programs that require an application, and on derivatives venues competing for flow. Retail accounts almost never reach them. The frequent misunderstanding is thinking a rebate applies to any limit order, when it applies only to a limit order that actually rests before filling.
How it works
An exchange sorts every fill into two buckets. An order that sits on the book and is later hit is a maker fill. An order that crosses the spread and executes against something already there is a taker fill. The maker column of the fee schedule falls as volume rises and, at some venues, goes below zero.
The rebate is paid per fill on the notional traded, credited in the quote currency or in fees owed. Because it is small, it only matters at scale: the business model of a market maker is thousands of small round trips where the rebate plus the captured spread exceeds inventory risk.
Two rules decide whether you earn it. First, the order must not be marketable when submitted. Second, many venues require a post-only flag so that an order that would cross is rejected rather than filled as a taker. Where the rate depends on 30-day volume, the tier is recalculated on a schedule the exchange publishes, so the rate is not fixed intraday.
Example
Illustrative numbers. Suppose a venue's top maker tier pays 0.005% and its taker rate at the same tier is 0.020%. A firm turns over $50 million in a month, half of it as maker fills and half as taker.
| Side | Notional | Rate | Result |
|---|---|---|---|
| Maker | $25,000,000 | -0.005% | +$1,250 received |
| Taker | $25,000,000 | 0.020% | -$5,000 paid |
Net cost is $3,750 rather than $5,000. The rebate does not make trading free, it shifts the break-even.
Why it matters when you buy
As an ordinary buyer you will not earn a rebate, but you pay for it: the taker rate that funds the rebate is the rate you are charged on a market order. The gap between the maker and taker columns on the fee comparison is the amount you save by using a resting limit order instead. On a venue with a wide spread, that saving can be smaller than the spread you cross to get filled.
Related terms
- maker taker fee — why resting orders pay less
- market maker — the firms these programs pay
- post only order — the flag that guarantees maker status
- limit order — the order type that can rest
- spread — the other half of a maker's income
- trading volume — what sets your fee tier
Questions
Can a retail account ever earn a maker rebate?
Rarely. Rebate tiers sit at monthly volumes far above retail size on most spot venues. A few derivatives exchanges post a small rebate at lower tiers, so check the exchange's own fee schedule rather than assuming either way.
Does a limit order always count as a maker order?
No. A limit order priced so that it crosses the current spread fills immediately and is charged as a taker. Use a post-only flag if maker treatment is the point of the order.
Why would an exchange pay traders to trade?
Because an empty book earns nothing. Paying for resting orders buys tighter spreads and deeper size, which attracts the taker flow the exchange actually charges.