With the ever-increasing use of virtual currency and its volatility, cryptocurrencies are being adopted across the world for various transactions. Cryptocurrency derivatives trading is a new trading area that many daytime traders are interested in. The last time we give you a brief introduction of why market volume is so important?
In this article we will give you the basics introduction of the types of orders, so you may have a deeper understanding of it.
Types of Orders
What is Market order？
This instruction directs the broker to execute the order upon receipt at the prevailing price level. Market orders are used when the trader is more concerned with initiating or liquidating a position immediately than with trying to achieve a specific execution price. Market orders ensure the trade will be executed unless prices are locked in at the daily limit or the order is entered too close to the end of the trading session.
What is Limit order？
The limit order also called an or-better order, is used when the trader wants to ensure that the execution price will be no worse than a certain level. For example, in order to buy in at a$1,150/ETH limit can only be executed at a price equal to or below $1,150.if the market is trading higher than that level when the brokerage receives the order, it must wait for the price to decline to $1,150 before it can execute the trade. if the price falls to return to that level, the brokerage is unable to fill the order. Similarly, in order to sell out at a $1,190/ ETH, the limit would indicate that the order can only be filled at a price equal to or above $1,190. limit orders will normally provide better fills than will market orders, but the trade-off is that they may not be executed. a trader whose primary concern is to get the order filled, particularly if it is an order to liquidate a losing position, should not use a limit order.
What is Fill or Kill
As the name implies, a fill-or-kill (FOK) order is a limit order that must be filled immediately or canceled.
Thanks for your time, after reading this article, you may have a deeper understanding of the types of orders? It was an honor to share the experience of cryptocurrency derivatives trading with you. In the next time, we will discuss the moving averages. For more information, please follow all of our newest articles on Bybit.
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