The same $500 trade costs $2.50 or $8.93, depending on how you place it
· 4 min read
Buy $500 of a coin and sell it again, and the round trip can cost $2.50 or $8.93. Same coin, same exchange, same minute. The difference is whether the order waited in the queue or jumped it.
What maker and taker mean
An exchange keeps a list of offers to buy and sell at stated prices. An order that joins that list and waits is a maker order: it adds an offer for someone else to take. An order that is filled at once against offers already there is a taker order: it removes them.
Many exchanges charge the taker more, because the waiting orders are what make the market usable. A limit order set away from the current price is usually a maker order. A market order is always a taker order.
The same $500 trade, both ways
Take example rates of 0.25% for a maker and 0.4% for a taker. They are round figures to show the shape, not any exchange’s rates. A trade is charged twice, once to buy and once to sell.
- Maker, both ways: $2.50.
- Taker, both ways, fee only: $3.99.
- Taker, with 0.5% slippage each way: $8.93.
The fee gap alone is $1.50. The larger part of the difference is slippage: a market order is filled at whatever the waiting offers are, which is a little worse than the price on the chart, and a waiting order is filled at the price it named.
How far the price has to move
Costs are what a trade has to earn back before it is ahead. At these example figures the maker round trip breaks even after a rise of 0.5%, and the taker round trip after 1.8%.
Over a month of trading
One trade is small change. The same trade made 20 times in a month is $49.94 as a maker and $178.55 as a taker, on $500 that was never more than $500.
What the cheaper order costs instead
A waiting order is cheaper because it might not be filled. If the price moves away, the order sits there and the trade does not happen, or happens later at a price that no longer suits. A market order pays more to be certain. Neither is the right one in general, and this article does not say which to use.
What this does not tell you
The fees and the slippage here are examples. Every exchange publishes its own fee schedule, the rates usually fall as monthly volume rises, and some charge makers nothing. Slippage depends on the coin and the size of the order. Network fees, withdrawal fees and tax are left out. This is arithmetic on example figures, not financial advice.
The trading fee and slippage calculator runs the same sum with the fee and slippage you are actually being charged.
