Liquidity-based Trading Fees and Exchange Volume

47 Pages Posted: 20 Sep 2012 Last revised: 1 Aug 2017

See all articles by Laura Cardella

Laura Cardella

Texas Tech University

Jia Hao

Babson College

Ivalina Kalcheva

University of California, Riverside

Date Written: August 1, 2017


If changes in make fees have the same effect on exchange volume as changes in take fees, then any split of the total fee to makers and takers will generate the same revenue from these fees to the exchange. We find that both volume and revenue are not equally sensitive to changes in make fees and take fees. Keeping the amount of the total fee constant, a fee-structure change that favors takers leads to an increase in both volume and revenue. These relations are more pronounced when traders' response to fee changes is more likely constrained by the tick size.

Keywords: maker-taker, taker-maker, fees, rebates, access fees, liquidity rebates, spread, volume

JEL Classification: G1, G2

Suggested Citation

Cardella, Laura and Hao, Jia and Kalcheva, Ivalina, Liquidity-based Trading Fees and Exchange Volume (August 1, 2017). Available at SSRN: or

Laura Cardella

Texas Tech University ( email )

Lubbock, TX 79409
United States

Jia Hao

Babson College ( email )

Babson Park, MA 02457-0310
United States

Ivalina Kalcheva (Contact Author)

University of California, Riverside ( email )

900 University Avenue
Riverside, CA 92521
United States

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