Market Maker
A market maker places orders with prices that are different from the current market price. Therefore, a Maker is a market depths maker.
Any pending/unfulfilled orders resulting from differences in pricing will be added to the depth chart in the order book on the exchange. Market maker’s trades are not filled immediately, they usually appear in the order book and are executed when a market taker finds the maker’s price satisfactory. These pending/unfulfilled orders form the market depths in the exchange, thus allowing traders to view the liquidity of that particular asset.
Usually, a market maker will try and sell for a higher price and buy for a lower price by using Limit orders. If you make an order with a price that is different from the market price, you are a market maker.
Market Taker
A market taker is a participant of the market, that is agreeing with the currently listed prices on the order book and wishes to fill his/her trade immediately. If the highest selling price and the lowest buying price is okay for you and you settle a trade, you become a market taker. Usually, a market taker will buy/sell instantly by using Market orders.
A Taker takes away liquidity. When a taker's newly placed order matches a pending order, the new order will immediately be fulfilled, and it will take away the pending/unfulfilled order from the exchange market depths.
- AlteumX Team
Was this article helpful?
That’s Great!
Thank you for your feedback
Sorry! We couldn't be helpful
Thank you for your feedback
Feedback sent
We appreciate your effort and will try to fix the article