A Market Order is an order to buy or sell at the current market bid or ask price. A Market Order generally increases the likelihood of a fill and is executed almost instantaneously in a liquid market. However, unlike a Limit Order that allows a trader to set a price limit acceptable to them, a Market Order does not offer such price protection and may fill at a price lower/higher than the current displayed best bid/ask, depending on the size of the order and the speed at which the market is moving. EQUOS has several controls to prevent unintended volatility in matched prices for Market Orders. For more information on those controls, see our help article here.
A Limit Order is an order to buy or sell at a specified price or better, which is called the Limit Price. The Limit Order allows a trader to set a specific price bound, thereby ensuring that if the order fills, the execution price will not be less favorable than the given Limit Price. Due to this price restriction, however, there is no guarantee that a Limit Order will be filled.
A Stop Order is an instruction to the system to submit a buy or sell order on the condition that a specified price trigger, called the Stop Price, is reached. A Stop Order is typically used to capture a profit or to limit a loss on price swings. Stop Orders can take the form of Stop Market Orders or Stop Limit Orders.
Stop Market Order
For a Stop Market Order the user defines the Stop Price. Once the Stop Price is reached, a Market Order will be placed which, like any regular Market Order, will be executed at the best available price. The Stop Market Order does not guarantee a specific execution price and therefore may be executed significantly away from its Stop Price. You should ensure that you have the appropriate amount of capital or assets in your account when the Stop Price is reached in order to ensure that the subsequent Market Order can be accepted. The same controls to prevent unintended volatility in matched prices that apply for regular Market Orders will apply to the Market Order that is sent once the Stop Price is triggered. For more information on those controls, see our help article here.
Stop Limit Order
A Stop Limit Order consists of two components: the Stop Price and the Limit Price. Once the Stop Price is reached a Limit Order will be placed which, like any regular Limit Order, becomes executable at the specified price or better. Placing a Stop Limit Orders eliminates the price risk associated with a Market Order, whose execution price cannot be guaranteed. However, a Stop Limit Order exposes the investor to the possibility that the order may not be filled even if the Stop Price had been reached. You should ensure that you have the appropriate amount of capital or assets in your account when the Stop Price is reached in order to ensure that the subsequent Limit Order can be accepted.
Time in Force
Fill-or-Kill (FOK) is a time in force order dictating that the order must be executed immediately in full size (“fill”), otherwise, the order will be cancelled (“kill”) in its entirety. The essence of a FOK order is to ensure that the investor does not receive a partial fill. Traders often use FOK order to capture a short-lived opportunity.
Immediate-or-Cancel (IOC) is a time in force dictating that the order, either to buy or sell, must be executed immediately, and any portion of the order that cannot be filled immediately will be cancelled. In contrast to a Fill-or-Kill (FOK) order an IOC order allows the partial fill of the order while cancelling the unexecuted portion.
Any Market Order that is sent without specification of the Time in Force will by default use Immediate-or-Cancel.
Good-Til-Cancel (GTC) is a time in force dictating that the order will remain on the order book until the order is either filled or cancelled. A Good-Til-Cancel order is available for Limit and Stop Orders and allows a trader to place a resting order in advance in anticipation of a specific price level. Once a GTC order is placed it can be filled at any point in time.
Any Limit Order that is sent without specification of the Time in Force will, by default, use Good-Til-Cancel.
Post-Only is a time in force dictating that the system will only place the order if such an order would not be executed immediately. In other words, if the bid price on a Post-Only order is greater than or equal to the current best ask price then the order would be cancelled. Similarly, if the offer price on a Post Only order is less than or equal to the current best bid price then the order would be cancelled. The Post-Only option is not available for Market Orders.
A Liquidation Order is an order that is sent by EQUOS to liquidate a position. To learn more about liquidations and when this may happen to you, please see our support page here, or have a look at some of our crypto guides such as this article.