Market Maker, Market Taker
| A market maker is a person who creates an order to buy or sell at a specified price. A market taker is a person who verifies the order and executes the buying or selling at the specified price. The terms "market maker" and "market taker" refer to the two different types of participants in a financial market. Market makers are the ones who create the orders that get traded, while market takers are the ones who execute those trades. Market makers play an important role in financial markets by providing liquidity. That is, they are always willing to buy or sell the assets that they trade in, even when there are no other buyers or sellers. This willingness to buy or sell at any time provides much-needed liquidity to markets, which helps to keep prices stable. Market takers, on the other hand, are the ones who provide the liquidity that market makers need. They are the ones who are willing to take the other side of a trade, even when the market maker is not. Without market takers, market makers would not be able to do their job. And without market makers, market takers would not have anyone to trade with. So, it is clear that both types of participants are essential to the functioning of financial markets. |
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