Welcome to the 5th step in the Step-By-Step Guides.
This is just a theory section on understanding how trading works in general on SINEGY Marketplace.
If you already understand the basics of being a market maker and market taker, you can skip to the step-by-step guides below:
- Step 5 - Article 1: How do you instantly buy Cryptocurrencies at the Market Price?
- Step 5 - Article 2: How do you Buy Cryptocurrencies at a Price you want?
- Step 5 - Article 3: How do you instantly sell Cryptocurrencies at the Market Price?
- Step 5 - Article 4: How do you Sell Cryptocurrencies at a Price you want?
If not, please read on.
There are 2 ways to trade on any exchange:
- Buy/Sell Cryptocurrencies instantly at the market price = You are called a "Market Taker".
- Buy/Sell Cryptocurrencies at the price you want = You are called a "Market Maker".
What is a Market Maker?
Imagine that you run a grocery store. You want to sell bananas, so you hang them in your store for sale at a specific price.
You are being a Market Maker.
The advantage of being a Market Maker is that exchanges will usually charge you lower trading fees. SINEGY Marketplace goes one step further by actually paying you for being a Market Maker (Called a maker rebate).
You are not charged a fee for trading. No other exchange in Malaysia does this.
The disadvantage is that you have to wait for someone else (Market Takers) to buy it from you.
Example: You want to sell 1 BTC at RM 270,000.
1. You do this by placing a "Sell" Limit Order of 1 BTC at RM270,000.
2. You will see your order appear on the "Ask" side of the orderbook.
3. If a "Market Taker" buys your entire stock of BTC at RM270,000, your BTC is sold and this is what you pay/receive:
- You receive RM270,000 for your BTC.
- You send 0.9975 BTC. You keep 0.0025 BTC because that is the maker rebate the exchange pays you. (0.25% at the time of this article) [0.25% of 1 BTC = 0.0025 BTC].
This meant you pay/received:
- You received full payment for 1 BTC.
- You keep an extra 0.0025 BTC = Maker rebate.
- You paid 0.9975 BTC.
(Note*: If you were buying BTC instead of selling, you will receive RM675 instead.)
For a step-by-step guide on how to be a Market Maker, please go to these guides:
- Step 5 - Article 2: How do you Buy Cryptocurrencies at a Price you want?
- Step 5 - Article 4: How do you Sell Cryptocurrencies at a Price you want?
What is a Market Taker?
Imagine that you go into a grocery store. You want to buy bananas, so you look at the ones hanging in the store and their price. You decide the price is reasonable and buy them.
You are being a Market Taker.
The advantage of being a Market Taker is that your order will be executed immediately.
The disadvantage is that you have to pay trading fees - called taker fees in this case and the price is set by someone else (Market Makers).
Example: You want to buy 1 BTC but don't know the market price (Or spot rate).
1. You do this by looking at the order with the cheapest asking price on the "Ask" side of the orderbook. This is always the order listed at the highest row of the "Ask" side.
2. You see that the order is selling 1 BTC for RM270,000.
3. You find that the price is reasonable and decide to buy that 1 BTC.
4. This is what you pay/receive:
- You pay RM270,000.
- You receive 0.995 BTC. You receive less 0.005 BTC because you are charged a trading fee (0.5% at the time of this article) [0.5% of 1 BTC = 0.005 BTC].
For a step-by-step guide on how to be a Market Taker, please go to these guides:
- Step 5 - Article 1: How do you instantly buy Cryptocurrencies at the Market Price?
- Step 5 - Article 3: How do you instantly sell Cryptocurrencies at the Market Price?