Order Instructions

Reduce-only

A reduce-only order ensures that any order executed only reduce an existing position, preventing the accidental increase or flipping of the position. Traders would use reduce-only orders to lock in profits or prevent further losses without the risk of unintentionally expanding their market exposure.

A Reduce-only order will be accepted only if it serves to reduce an open position.

When a market order reduces the position size, or a more aggressive limit order is set, the reduce-only order will be canceled, as it no longer serves to reduce the position.

Minimum Order Value

For reduce-only orders, we will allow users to submit an order that is below the instrument's minimum order value only if the order fully closes an open position (i.e. the size of the reduce-only is equal to the position size).

A 'Reduce-only' order can be placed with any Order Types and Instructions.

Common Scenarios

How does an increase in position affect reduce-only orders?

When a position was increased by other trades, all existing reduce-only orders will remain unchanged.

For example:

• A trader currently has

  • Long 100 ETH position

  • Reduce-only Limit Sell Order of 100 ETH @ $4,500

• If the trader submits a Market Buy Order of any amount of ETH:

  • the Reduce-only Limit Sell Order remains open.

How does a reduction in position affect reduce-only orders?

When a position has been reduced / closed / reversed by other trades, existing reduce-only orders that has an amount greater than the current position will be cancelled.

Example 1:

• A trader currently has

  • Long 100 ETH position

  • Reduce-only Limit Sell Order of 100 ETH @ $4,500

• If the trader submits a Market Sell Order of any amount of ETH:

  • the Reduce-only Limit Sell Order will be cancelled.

Example 2:

• A trader currently has

  • Long 100 ETH position

  • Reduce-only Limit Sell Order of 60 ETH @ $4,500

• If the trader submits a Market Sell Order of 40 ETH or less:

  • the Reduce-only Limit Sell Order remains open.

• If the trader submits a Market Sell Order of more than 40 ETH:

  • the Reduce-only Limit Sell Order will be cancelled.

How do Limit Orders affect reduce-only orders?

For example, a trader currently has:

• Long 100 ETH position

• Reduce-only Limit Sell Order of 50 ETH @ $4,500

• Reduce-only Limit Sell Order of 50 ETH @ $4,600

Scenario 1: If the trader submits a Limit Sell Order of 1 ETH @ $4,400

• the Reduce-only Limit Sell Order of 50 ETH @ $4,500 remains open.

• the Reduce-only Limit Sell Order of 50 ETH @ $4,600 will be cancelled.

Scenario 2: If the trader submits a Limit Sell Order of 1 ETH @ $4,700

• Both the Reduce-only Limit Sell Orders remains open.

• The new Limit Sell Order of 1 ETH @ $4,700 is opened.

Scenario 3: If the trader submits a Reduce-only Limit Sell Order of 1 ETH @ $4,700

• The new order (Reduce-only Limit Sell Order of 1 ETH @ $4,700) will be rejected (cancelled).

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Post-only

A post-only order is a type of limit order that ensures the trader pays only the maker fees and doesn't take liquidity from the market. If such an order would immediately match with an existing order, it gets canceled instead of executed. This ensures the trader's order goes into the order book, maintaining the position of a market maker rather than a taker, thereby benefiting from lower fees and contributing to market liquidity.

Post-only orders

• Can only be placed with Limit orders and Stop Limit orders.

• Will always result in Maker trades.

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Good Till Cancelled (GTC)

A Good Till Cancelled (GTC) order remains active in the market until it's either executed or manually canceled by the trader.

This type of order is beneficial for investors who do not wish to monitor their trades daily but have specific price points at which they wish to buy or sell a security. It ensures that the order will remain rested on the orderbook until it reaches the desired price level or is canceled.

GTC orders

• Can be used with all order types except Market orders.

• Can be used with all order instructions except IOC orders.

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Immediate or Cancel (IOC)

The purpose of an Immediate or Cancel (IOC) order is to ensure immediate execution for as much of an order as possible up to a specified price, with any unfilled part being instantly canceled.

An IOC order is similar but more powerful than a Market Order, because it immediately fills against the orderbook's rested orders, but only for up to a certain price set by the trader. This provides protection to a trader by preventing slippage beyond their specified price.

However, rapid price fluctuations can cause an IOC order to not be fully executed instantly. In such scenarios, the unfilled portion is immediately canceled, potentially leading to no trade if the market moves too swiftly.

IOC orders

• Can only be used with a Limit Order type.

• Can be used with Reduce-only, but not with GTC and Post-only.

• Will always result in Taker trades.