Limit Order
A limit order allows you to buy or sell a specific amount of an asset at a predetermined price or better. Once placed, the system displays the order on the order book and matches it with available orders—either at your specified price or a more favorable one.
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Example Scenario:
If BTC is currently priced at 42,000 USDT and you wish to buy at 40,000 USDT:
- Select Limit Order and set the buy price to 40,000 USDT.
- The order executes automatically if the price drops to 40,000 USDT or lower.
Advanced Limit Order Options
Beyond standard limit orders (default: Good till Canceled), advanced limit orders offer three execution methods:
Post Only
- Purpose: Ensures you act as a market maker (liquidity provider).
- Behavior: Cancels if it would immediately match with an existing order.
Fill or Kill
- Requirement: Must be fully executed immediately; otherwise, canceled entirely.
Immediate or Cancel
- Rule: Partial fills are allowed; unfilled portions cancel automatically.
Practical Examples:
| Scenario | Order Type | Buy Price | Order Size | Outcome |
|---|---|---|---|---|
| 1 | Post Only | 30,000 USDT | 1 BTC | Enters order book if no matching sell exists. |
| 2 | Fill or Kill | 30,741 USDT | 1 BTC | Cancels if only 0.882 BTC available. |
| 3 | Immediate or Cancel | 30,741 USDT | 1 BTC | Fills 0.882 BTC; cancels remainder. |
Market Order
Market orders execute instantly at the best available price, ideal for rapid trades. Each platform sets limits on order size and value.
Key Features:
- Instant Execution: No price setting required.
- Liquidity-Dependent: May split large orders automatically.
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Example Use Cases:
- Buying BTC at current market price (e.g., 40,500 USDT).
- Using Market Close All to exit positions swiftly.
Futures-Specific Rules:
- Price Limits: System retries unfilled orders for up to 10 minutes.
- Size Limits: Large orders split into smaller, sequential executions.
Reduce-Only Order
Definition and Purpose
Reduce-only orders exclusively decrease your position size, preventing unwanted position increases.
Modes:
- One-Way Mode: Manual selection for closing positions.
- Hedge Mode: Close orders are reduce-only by default.
Priority Rules
Orders prioritize better prices and earlier timestamps.
Examples:
| Position | Existing Orders | New Order | Result |
|---|---|---|---|
| 100 BTC Long | None | 200 BTC Close | Adjusts to 100 BTC. |
| 100 BTC Long | 80 BTC @ 17,000 20 BTC @ 18,000 | 50 BTC @ 16,000 | Modifies/cancels existing orders. |
FAQ Section
1. What’s the difference between limit and market orders?
- Limit Order: Controls price but may not execute immediately.
- Market Order: Guarantees speed but not price.
2. When should I use Post Only?
Use it to ensure maker fees and avoid taker fees when liquidity provision is your goal.
3. Can reduce-only orders increase my position?
No—they’re designed solely to reduce or close positions.
4. How does Fill or Kill protect my trade?
It prevents partial fills, ensuring full execution or none at all.
5. Are there limits on market order sizes?
Yes, exchanges impose maximums per order to manage liquidity.
6. What happens if my reduce-only order exceeds my position?
The system auto-adjusts the amount to match your available position.
Final Tip: Always monitor order books and liquidity to choose the best strategy for your goals.