Subsidizing Liquidity : The Impact of Make / Take Fees on Market Quality ∗

@inproceedings{2013SubsidizingL,
  title={Subsidizing Liquidity : The Impact of Make / Take Fees on Market Quality ∗},
  author={},
  year={2013}
}
  • Published 2013
Competition among stock exchanges has increased dramatically over the last decade. To attract trading volume, most exchanges introduced makertaker fees, an incentive scheme that rewards liquidity suppliers and charges liquidity demanders. Using a change in fees on the Toronto Stock Exchange, we analyze how the breakdown of trading fees between liquidity demanders and suppliers affects market outcomes. Although posted liquidity improves, after accounting for the fees, trading costs are… CONTINUE READING