A Maker, or a Maker order is a type of limit order that goes on the order book partially or fully, not immediately being matched to a buy or sell order. The key characteristics of a Maker order is that it will have to “wait to be matched”, no matter if it’s a buy or sell order.
In general, if there is no matching order available for the maker order to be filled immediately, the order will be displayed as pending on the order book to help “make” the market. A Maker order provides liquidity to the trading platform and also helps increase the market depth. Therefore, it is considered as a liquidity provider.
A Taker, or a Taker order is a type of limit order that is executed immediately by filling the volume partially or fully, before going on the order book. The key attribute to a Taker order is that they “actively and immediately match with orders once they are placed”.
In general, by actively matching with orders that are already on the order book, Taker orders are "taking" liquidity from a trading platform and will lead to a decrease in the market depth, and for that reason, they are called "Takers."
How to understand the difference between Maker Orders and Taker Orders?
To thoroughly understand and distinguish Maker and Taker orders, you need to familiarize yourself with the concepts of market orders vs. limit orders. A limit order sets the minimum or maximum price of an order. The order gets executed once the price level is triggered, whereas a market order is a transaction that is meant to be executed as quickly as possible at the existing/market price.
In general, market orders are always taker orders, as they are executed immediately at the best available price. However, trades from limit orders could be takers or makers. If a limit order can’t be matched with an existing order immediately, the limit order is added to the order book to provide liquidity for the market, displayed as pending for the next possible match, and is therefore considered a Maker order. On the flip side, if a limit order is matched with an existing order immediately, the limit order is taking volume off the order book, causing it to be considered as a Taker order.