Order Types

Limit Order

A limit order is a type of trade order where you specify the price at which you want to buy or sell a security.

Unlike market orders, where trades are executed immediately at the best available prices, limit orders are set to execute only at your specified price or better.

This gives you control over the price, though it doesn't guarantee the order will be executed if the market price never reaches your specified limit. It's a useful tool for traders who prioritize price over immediacy.

Market Order

A market order is a command to buy or sell an instrument immediately for the full amount requested.

Unlike limit orders, market orders do not specify the price and are executed at the best available prices in the market at the time of the order.

If there are not enough orders at the top of book price for a complete fill, the remaining order amount will fill at the next best price until the entire order has been filled.

While this ensures quick execution, the final execution price may vary, especially in volatile or less liquid markets. Market orders are commonly used when speed of execution is prioritized over price control.

You should only use this order type if you require immediacy in filling your full amount specified, and if you are not sensitive to price slippages.

You will only need to enter the 'Amount' field to submit your buy or sell order.

A market order will always result in Taker trades.

Stop Orders

There are 2 types of Stop Orders: Stop Limit Order, and Stop Market Order.

Stop Limit Order

Stop Limit Order executes a Limit Order at a specific price after a given stop Trigger Price has been reached, combining elements of stop orders and limit orders. Traders use it to have greater control over the execution price, particularly in volatile markets. They might employ this order to limit losses or protect profits without the risk of slippage associated with stop-loss orders.

However, in fast moving markets, the market may gap over the limit price, which results in the stop being triggered but potentially leaving the limit order unexecuted if the asset's price doesn't return to the limit price.

Stop Market Order

A Stop Market Order is designed to sell or buy a security when it reaches a specific price, known as the Trigger Price. Once the Trigger Price is hit, a Market Order would be executed. Traders use this to limit losses or to enter the market at a breakout point.

However, in volatile markets, the execution price can differ significantly from the stop price due to rapid price changes, especially if the market gaps past the stop price, it would execute at the next available price, causing slippages.

Last updated