Limit Order Rebates

Commission

Limit order rebates represent a payment from an exchange to a liquidity provider for posting an order on the order book that rests and is subsequently executed. This mechanism incentivizes market participants to narrow the spread and increase depth, enhancing overall market quality and reducing transaction costs for all traders. The rebate amount is typically a fraction of a cent per share or contract, varying by exchange and asset class, and is directly offset by the fees paid by takers who remove liquidity. Consequently, a profitable strategy often involves actively managing order placement to qualify for rebates, particularly within high-frequency trading environments.