Introduction to Post-Only Orders
Available as an additional option to Limit or Conditional Limit Orders, Post-Only Orders serve to strictly ensure that your Limit Orders will be placed into the order book and therefore receive a maker rebate then it is ultimately executed. By selecting this option, the system will automatically cancel the Limit Order, if it detects that it will be executed immediately upon the order placement.
Main purpose for trading
By selecting the Post-Only option with your Limit Orders, traders can ensure that their Limit Orders will enter the order book and therefore receive a maker rebate when the order is executed. What this means for traders is that they can now have more control over their trading fees, which is particularly sensitive for large volume or scalp traders.
In a highly volatile market situation (e.g. dumping), trader A places a buy long 100,000 BTCUSD contracts at USD 9000 and the current best ask price shown in the order book is 9001 but quickly moved to 8995 when the Limit Order is finally placed. The following are 2 examples of Trader A placing the Limit order with or without selecting the Post-Only option.
- Without Post-Only option
As the best ask price has already moved to a better price point (USD 8995) compared to the buy order's limit price (USD 9000), the system will immediately execute the Limit Order as a Market Order and fill it from the best available ask price all the way to USD 9000. As a result, this may unintentionally cause trader A to pay a taker fee when Trader A was actually expecting to receive a maker rebate. Note: The execution of your Limit Order will also be hugely dependant on your Time-In-Force strategy chosen for your limit order.
- With post-only option
As the best ask price has already moved to a better price point (USD 8995) compared to the buy order's limit price (USD 9000), resulting in immediate order execution, the system will automatically cancel this limit order as it was unable to be placed into the order book. This means that Trader A does not have to pay any unintended taker fees.