Contract Maker

In the context of order book trading, a contract Maker refers to a trader who provides liquidity to the market, also known as the "order placer".

Makers first set the price and quantity of their orders and list them, waiting for other users to match and execute the trades. If there are no matching orders in the market temporarily, the order remains on the exchange's order book, providing pricing for the market. For example, in Bitcoin contract trading, traders who submit limit orders are Makers. They specify the exact price at which they wish to trade, and their orders queue in the order book for matching, which may not be executed immediately.

In contrast, contract Takers (liquidity takers) actively execute trades with existing listed orders. They place orders of a certain quantity based on the prices of existing orders in the exchange's order book to complete transactions immediately, acting as liquidity extractors. Generally, Makers enjoy lower trading fees because they add liquidity to the market, while Takers pay higher fee rates.