Which order type is used to provide liquidity to the order book?

Which order type is used to provide liquidity to the order book?

• A. Market order
• B. Stop order
• C. Limit order
• D. Poster order

Answer: (D)

Liquidity in the order book comes from orders that sit on the book and are ready to be matched, not from orders that are executed immediately. A poster order is designed to be posted to the book, providing liquidity by resting there rather than taking it. It stays on the book until it’s filled or canceled, contributing depth to the market (a maker order). Market orders, by contrast, take liquidity by executing against resting orders. Stop orders aren’t about adding liquidity; they trigger under conditions and may become active orders later. A limit order can add liquidity by resting on the book, but the term “poster order” specifically denotes the action of posting to the book to provide liquidity, which is why it’s the best fit here.

Liquidity in the order book comes from orders that sit on the book and are ready to be matched, not from orders that are executed immediately. A poster order is designed to be posted to the book, providing liquidity by resting there rather than taking it. It stays on the book until it’s filled or canceled, contributing depth to the market (a maker order).

Market orders, by contrast, take liquidity by executing against resting orders. Stop orders aren’t about adding liquidity; they trigger under conditions and may become active orders later. A limit order can add liquidity by resting on the book, but the term “poster order” specifically denotes the action of posting to the book to provide liquidity, which is why it’s the best fit here.