Limit Orders
A limit order allows traders to set the order quantity along with their acceptable maximum buy price or minimum sell price. The system executes the order at the best available price within the specified limit when the market price matches the trader's expectation.
Example Scenario:
If the current BTC market price is 42,000 USDT, but you want to buy at a lower price (40,000 USDT), place a limit order with your target price. Once the market drops to ≤40,000 USDT, the order auto-executes.
Advanced Limit Orders
Advanced limit orders offer three execution mechanisms beyond the standard "Good till Canceled" (GTC):
Post Only (Maker)
- Ensures the order acts as a Maker (adding liquidity). If it would immediately match existing orders (becoming a Taker), the system cancels it.
Fill or Kill (FOK)
- The order must execute fully at the specified price or be canceled immediately.
Immediate or Cancel (IOC)
- The order executes partially at the best available price, canceling any unfilled portion.
Practical Examples:
- Post Only: A buy order at 30,000 USDT (below the lowest ask) succeeds as a Maker. At 30,740 USDT (matching the ask), it’s canceled to avoid Taker fees.
- FOK: A 1 BTC buy order at 30,741 USDT fails if only 0.882 BTC is available.
- IOC: The same 1 BTC order partially fills 0.882 BTC, canceling the remaining 0.118 BTC.
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Market Orders
Market orders execute instantly at the best current price, prioritizing speed over price control. Key notes:
- Spot Trading: Single orders ≤100,000 USDT. Larger orders fail.
- Contracts: Quantity limits vary by market conditions.
Use Cases:
- Quick Purchase: Buying BTC at ~40,500 USDT with a 20,000 USDT market order.
- Market Close: Liquidating 100 BTC contracts at the latest price (e.g., 10,000 USDT).
Contract-Specific Rules:
- Price Limits: Market orders adhere to the same min/max price rules as limit orders.
- Auto-Retry: Unfilled contracts orders recalculate limits every second for up to 10 minutes.
- Auto-Splitting: Large positions exceeding max order size split into smaller chunks for execution.
Reduce-Only Orders
Definition:
Reduce-only orders strictly decrease existing positions, preventing new ones. In Buy/Sell mode, users manually enable this; Hedge mode auto-applies it to all closing orders.
Priority Rules:
- Buys: Higher prices prioritized.
- Sells: Lower prices prioritized.
- Time: Earlier orders take precedence at equal prices.
Examples:
| Scenario | Action | Result |
|---|---|---|
| No open position | Place reduce-only sell | Fails |
| 100 BTC long | Reduce-only sell 200 BTC | Adjusts to 100 BTC |
| Competing orders | Better-priced order executes first | Adjusts/cancels lower-priority orders |
Placement Methods:
- Manual Selection: Check "Reduce-Only" in order forms.
- Auto-Applied: Stop-loss, take-profit, and closing orders in Hedge mode.
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FAQ
Q1: Can limit orders guarantee execution?
A: No—they only fill if the market reaches your price. Use Post Only to avoid unexpected Taker fees.
Q2: Why did my market order fail?
A: Check if it exceeded size/price limits or faced liquidity issues during high volatility.
Q3: How does reduce-only prevent mistakes?
A: It blocks accidental position increases, crucial for risk management.
Q4: What’s the difference between FOK and IOC?
A: FOK demands full execution; IOC allows partial fills + cancellation.
Q5: Can I combine order types?
A: Yes! E.g., a reduce-only limit order with Post Only for precise, low-fee trades.
Q6: Are there fees for canceled orders?
A: No fees if unexecuted, but Post Only cancellations avoid Taker costs.