Crypto Market and Limit Orders: Execution, Price Control, and Conditions
Summary
The document explains how market and limit orders work for buying or selling cryptocurrency. A market order seeks execution at the best available price as soon as possible, while a limit order sets a minimum sale price or maximum purchase price. It also describes advanced limit instructions: post-only orders avoid immediately matching existing orders, fill-or-kill orders require the full quantity to execute at once, and immediate-or-cancel orders allow partial execution before canceling the remainder.
The examples use a market price of $100 to illustrate limit prices and compare the conditions for full versus partial fills. The guidance favors considering urgency, desired price control, and market volatility when choosing an order type. Market orders can encounter slippage, especially in volatile conditions; limit orders may remain unfilled and miss an opportunity. Fees may also depend on whether an order adds or removes liquidity, and an immediately executed limit order can be treated as a taker. The article offers general concepts rather than a quantitative comparison of execution outcomes.
Key ideas
- A market order prioritizes immediate execution at the best available prices.
- A limit order specifies the price at which a trader is willing to buy or sell, or a better price.
- Post-only instructions cancel orders that would immediately match existing liquidity.
- Fill-or-kill requires full immediate execution, while immediate-or-cancel permits a partial fill.
- Market orders may incur slippage, while limit orders may not execute.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.