Final answer:
Price improvement typically benefits the trader who receives a better price than expected, especially those who submit limit orders. Market makers can also benefit by capturing the spread. Market order submitters may not see direct benefits from price improvement.
Step-by-step explanation:
The concept of price improvement in trading refers to the possibility of achieving a better price than the one initially quoted or expected for a trade, which benefits the trader who receives the improved price. Generally speaking, the party that submits a limit order can benefit from price improvement because their order may be executed at a better price than specified. Market makers can also benefit when they capture the spread between the buy and sell prices.
However, the party who submits a market order may not directly benefit from price improvement because market orders are executed at the best available current price, which can result in a less favorable trade compared to a limit order in a rapidly changing market. Ultimately, it is limit order submitters who stand to gain the most from price improvement since they could sell at a higher price or buy at a lower price than their limit order specified.