How the order book matches the two sides

There is no house on the other side of an event contract, so the two sides have to find each other. Orders rest on the book until someone takes them; the order that was already there is the maker and the order that arrives is the taker, and that difference decides who pays a fee.

Desk spec

fills: 100
maker: 74
taker: 26
taker fee: 0.02

the contractA question turned into a tradable share. It pays a fixed amount on yes and nothing on no, and its price sits from 0c to 100c. On the samples it pays 1.00 and trades at 62c.

the priceThe market's implied chance of the event, so 62c is a 62.0% chance. The bid and the ask bracket it, and the 2c between them is the first cost a trader pays.

the settlementThe named source publishes the answer, and the payout follows. Of 200 sample contracts, 176 settled from the source and 4 were voided and refunded.

Direct answer

An event contract trades on an order book: orders rest at prices until someone takes them. The order already on the book is the maker; the one that arrives to fill it is the taker. On the samples 74 of 100 fills were maker fills paying no fee and 26 were taker fills paying 0.02 a contract, so how an order is placed changes what it costs.

Resting and taking

A book has two sides. Sellers of a contract rest their asks above the price; buyers rest their bids below it. A new order that crosses the gap trades against whatever is resting, and any part it cannot fill stays on the book until it is cancelled or taken.

Sample C - the 100 fills, by who placed and who took
Role	Fills	Share	Fee per contract
maker, in the taker's fill	74	74.0%	0.00
taker, crossing the spread	26	26.0%	0.02
total	100	100%	-

sample C - the fee, by role fills = 100 maker fills = 74 -> fee 74 x 0.00 = 0.00 taker fills = 26 -> fee 26 x 0.02 = 0.52 total fee on 100 contracts = 0.00 + 0.52 = 0.52 average fee per contract = 0.52 / 100 = 0.0052 share of fills that were maker = 74 / 100 = 74.0% so placing an order and waiting is cheaper than crossing, and the difference is 0.02 a contract on the taker side.

The maker's advantage and its cost

A maker does not pay the taker fee, but pays instead in uncertainty: the resting order may never fill, or may fill only if the market moves against it. A taker pays a fee and the spread for certainty of execution. Neither is free, and the choice between them is a trade of one cost for another.

sample C - the two ways to buy 100 contracts as a taker, crossing the spread: price paid = 62c ask fee = 0.02 -> 100 x 0.02 = 2.00 total = 62.00 + 2.00 = 64.00 as a maker, resting at 60c: price paid = 60c bid fee = 0.00 total = 60.00 + 0.00 = 60.00 but the order may not fill at all, or may fill only after the price has moved, which is what the 4.00 difference buys.

The order-book mechanics described here are generic and the counts are invented. A real venue's matching rules, its fee schedule and whether it charges makers at all are set by that venue, and they should be read there rather than assumed from this page.

Before assuming a fill will happen

Look at the size resting on each side, not just the best price.
Decide whether you are willing to wait as a maker or need to cross as a taker.
Check the fee schedule for both roles, because it is not always the taker who pays.
Remember that a resting order can be filled only partially, or not at all.
Know the cancellation rule, because a resting order is a live position.

How the order book matches the two sides

Resting and taking

The maker's advantage and its cost

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