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How Does a Market Order Contribute to Market Liquidity?

A market order is considered a "liquidity-taking" order because it removes existing limit orders from the order book, immediately executing against them. It does not contribute to the depth of the book but rather consumes the liquidity provided by limit orders.

The limit orders, which set the bid and ask prices, are the true "liquidity providers."

How Does a ‘Limit Order’ Differ from a ‘Market Order’ in the Context of Preventing Slippage?
What Is the Difference between Market Orders and Limit Orders in the Context of the Spread?
How Do ‘Limit Orders’ Mitigate Slippage Risk Compared to ‘Market Orders’?
What Is an “Order Book” and How Does Its Depth Relate to Market Liquidity?