Which statement correctly describes Aggressor order’s impact on liquidity?

Which statement correctly describes Aggressor order’s impact on liquidity?

• A. Systematically withdraws liquidity from the order book, executed with or without price limit against poster orders.
• B. Adds liquidity to the order book
• C. Remains passive and does not trade
• D. Only trades with price limit

Answer: (C)

Aggressor orders are actions that remove liquidity from the market by immediately matching with resting orders on the opposite side. When you submit an aggressor order, you cross the spread and take available quantities from the book, reducing the depth and available quotes at the best prices. In other words, aggressors “take” liquidity rather than add to it. Options that describe adding liquidity, remaining passive, or trading only with price limits don’t fit this behavior, since being aggressive means actively trading against the resting orders and withdrawing liquidity from the book.

Aggressor orders are actions that remove liquidity from the market by immediately matching with resting orders on the opposite side. When you submit an aggressor order, you cross the spread and take available quantities from the book, reducing the depth and available quotes at the best prices. In other words, aggressors “take” liquidity rather than add to it.

Options that describe adding liquidity, remaining passive, or trading only with price limits don’t fit this behavior, since being aggressive means actively trading against the resting orders and withdrawing liquidity from the book.