Taker Key Points
- A taker is a trader who places an order that is instantly matched with an existing order in the order book on a cryptocurrency exchange.
- Takers remove liquidity from the market as they fill existing orders.
- Taker fees are usually higher than maker fees on most cryptocurrency exchanges.
- The term ‘Taker’ is not limited to cryptocurrency trading but is also used in traditional financial markets.
Taker Definition
In the realm of cryptocurrency and blockchain, a Taker is a trader who places an order that matches immediately with an existing order on the exchange’s order book. Takers are called so because they ‘take’ the market prices as they are and do not contribute to the market’s liquidity.
What is a Taker?
In cryptocurrency trading, a taker is an individual or entity that places an order that gets immediately filled because it matches an existing order in the order book.
This could be either a buy or sell order that is executed at the current market price or at a specified limit price.
As takers, these traders are taking the prices currently available in the market instead of adding new orders to the order book.
Who can be a Taker?
Any participant in a cryptocurrency exchange can be a taker.
This includes individual retail traders, institutional investors, and even trading bots programmed to execute trades on an exchange.
As long as the entity places an order that is immediately fulfilled by matching with an existing order, they are considered a taker.
When does one become a Taker?
A trader becomes a taker when they place an order that gets immediately filled by matching with an existing order in the order book of an exchange.
This can happen at any time when the market is open and there are matching orders available.
Where can one be a Taker?
One can be a taker on any cryptocurrency exchange or trading platform that facilitates the buying and selling of cryptocurrencies.
This includes both centralized and decentralized exchanges.
Why does the Taker role exist?
The role of the taker exists to facilitate immediate transactions at the current market price.
Without takers, there would be no one to execute the orders placed by makers, which would greatly reduce the liquidity and efficiency of the market.
How does a Taker affect the market?
A taker affects the market by removing liquidity.
This is because they are filling existing orders rather than adding new ones to the order book.
However, by doing so, they facilitate the execution of trades and contribute to the overall trading volume of the market.
Typically, takers are charged a higher fee by exchanges due to the immediate fulfillment of their orders and the resulting decrease in market liquidity.
