What Influences 'Maker-Taker' Decisions in U.S. Equity Markets?

We examine determinants of U.S. equity trader maker-taker decisions (e.g., execute a non-marketable limit order or marketable order). Those with a higher maker tendency are slower, larger-size traders who exhibit smaller price impact and concentrate their trading in fewer markets. When the bid-ask spread is narrower, depth is thinner, volume is lower, and volatility is higher, traders are more likely to take quotes. Trading costs differ between orders, and implicit and explicit costs are negatively (positively) related for maker (taker) executions. Overall, our findings indicate trader characteristics, market conditions, and trading cost dimensions influence order type decisions