The market order will be executed at the best price available in the order book at the execution time. Traders do not need to set the price which allows the order to be immediately executed. Although market order guarantees the execution of the order, the execution price cannot be guaranteed because the market price may fluctuate rapidly. When traders need to enter or exit a volatile fast-moving price market, market orders are generally used.
- Definition: Traders are able to set their leverage and contract quantity, but not the executed price.
- Features: The order will be immediately filled at the best available price from the order book. However, though the execution of the order is guaranteed, the price at which the order will be executed at is not certain, since prices may change quickly.
- Executed Price: Filled at the best available price from the orderbook.
- Advantage: In fast moving price conditions, traders may enter or exit the market immediately.
Limit Order allows traders to set the order price, and the order will be filled at the order price or an executed price better than the order price.
For Buy Limit Orders, the order price must be set at a price lower than the last traded price, or it would be filled immediately as a market order (a 0.04% trading taker fee will be charged.) The same applies to Sell Limit Orders, but the order price must be higher than the last traded price.
When submitting a limit order, if there are no orders in the order book that are better than or equal to the order price to be matched, the limit order will enter the order book to await execution which in turn will increase the depth of the market. Hence, as a market maker, the trader will pay a 0.02% Maker fee.
In addition, limit orders can also be used to partially or fully close a position. The advantage of a limit order is that it can guarantee the transaction at the specified price, but it also faces the risk of the order failing to be executed.
- Definition: Traders are able to set their leverage, contract quantity and set the order price. When the last traded price triggers the set order limit price, the order will be executed.
- Features: When the last traded price triggers the set order limit price, the order will be executed.
- Executed Price: Limit Price or Best Available Price.
- Advantage: Guarantee an executed limit price.