An order is deemed to be a market maker when it is placed on the order book waiting to be filled. An example of this is when a trader chooses 'Limit order', as such an order would provide liquidity on the order book, helping to 'make the market', is therefore deemed as a market maker. This process increases the market depth of the platform and in return, market makers will receive a percentage of the transaction as a rebate when the order is filled.
An order is deemed as a market taker when it is immediately filled without being placed on the order book. An example of this is when a trader chooses 'Market order', as such an order do not go on the order book and is taking liquidity off from the order book, is therefore deemed as a market taker. This process decreases the market depth of the platform, so the trader will be charged a certain percentage of the transaction fee when the order is filled.
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