What is the function of a poster order?

What is the function of a poster order?

• A. Execute immediately at market price
• B. Set a reference price
• C. Provide liquidity to order book
• D. Cancel existing orders

Answer: (C)

A poster order is meant to add liquidity to the market by placing a limit order that sits on the order book rather than executing immediately. It rests there so other traders can trade against it, increasing market depth and potentially narrowing spreads. This maker role contrasts with taking liquidity, which happens when a market order or a price-improving order matches immediately with existing orders on the book. Some venues use post-only rules to ensure such orders never immediately sweep the book, reinforcing the idea of providing liquidity. In short, the function is to supply resting orders to the book, making liquidity available for others.

A poster order is meant to add liquidity to the market by placing a limit order that sits on the order book rather than executing immediately. It rests there so other traders can trade against it, increasing market depth and potentially narrowing spreads. This maker role contrasts with taking liquidity, which happens when a market order or a price-improving order matches immediately with existing orders on the book. Some venues use post-only rules to ensure such orders never immediately sweep the book, reinforcing the idea of providing liquidity. In short, the function is to supply resting orders to the book, making liquidity available for others.