Maker
A maker adds liquidity by placing limit orders that rest in the order book, often facing different fees than takers.
Definition
A maker adds liquidity by placing orders that rest in the order book. Makers typically use limit orders rather than market orders.
Why it matters
Makers can achieve better prices and sometimes pay lower fees under a maker taker model. Maker behavior helps tighten bid ask spread and can improve execution for the whole market.
Common pitfalls
Fill risk: Maker orders may not fill, especially in fast moves.
Adverse selection: If informed flow arrives, makers can be filled just before price moves.