What is an Aggressor order?

What is an Aggressor order?

• A. A passive order that waits for price movements and does not trade.
• B. Systematically withdraws liquidity from order book, executed with or without price limit against poster orders.
• C. An order that executes only at the best available price.
• D. An order that cancels itself after a set time if not filled.

Answer: (B)

An aggressor order is about taking liquidity from the market. It is executed against resting orders on the other side of the book, crossing the spread and removing liquidity that someone else had posted. This can be a market order or an aggressive limit order that crosses the best price. The option that describes systematically withdrawing liquidity from the order book and being executed against poster orders captures this taker behavior. The other descriptions describe passive behavior, or simply trading at the best available price without indicating aggressiveness, or a time-limited cancelation, none of which define an aggressor order.

An aggressor order is about taking liquidity from the market. It is executed against resting orders on the other side of the book, crossing the spread and removing liquidity that someone else had posted. This can be a market order or an aggressive limit order that crosses the best price. The option that describes systematically withdrawing liquidity from the order book and being executed against poster orders captures this taker behavior. The other descriptions describe passive behavior, or simply trading at the best available price without indicating aggressiveness, or a time-limited cancelation, none of which define an aggressor order.