Market Takers

Market takers are presented as complementary to market makers in liquidity mechanics. Market takers execute trades immediately by accepting existing prices. Market takers are aggressive market participants. Market takers consume liquidity in the market. Market takers use market orders to buy or sell immediately. Market takers execute trades at the best available prices. The article identifies taker consumption of maker-provided liquidity as the core mechanism of market function. A market taker sends a market order to the matching algorithm when executing a buy or sell action. The current market price is set when a market maker and a market taker agree on a trade price. Market taker orders must be filled against available counterparties. An aggressive order from a market taker triggers processing by the matching algorithm. Market taker orders can move prices sharply when available liquidity is thin.