#Definition
A Market Taker is a trader who agrees to the price currently listed on the order book (the "maker's" price) and executes a trade immediately. Takers "take" liquidity from the market.
#Taker vs. Maker
| Feature | Market Maker | Market Taker |
|---|---|---|
| Action | Places limit orders (adds liquidity) | Places market orders (removes liquidity) |
| Speed | Waits for a counterparty | Executes immediately |
| Fees | Often lower (or rebates) | Often higher |
| Goal | Earn spread, provide depth | Enter/exit position quickly |
#Importance
Takers are essential for:
- Price Discovery: Their aggressive buying/selling moves the price to reflect new information.
- Volume: They generate the actual trade volume.