Understanding limit and stop limit orders

Limit order vs stop limit order

A limit order is an order to buy or sell a specified quantity of an asset at or better than a specified limit price. A limit order will only ever be filled at the specified price or better.

A stop limit order is an order to buy or sell a specified quantity of an asset only if and when the stop price is reached and then only at or better than a specified limit price.

Order type Your actions Filled when
Limit order 1. Enter a limit price.
2. Enter a max sell amount.
The price you specified is reached or better.
Stop limit order 1. Enter a stop price.
2. Enter a limit price.
3. Enter a max sell amount.
The stop price is reached, turning the order into a limit order, and the limit price is reached or better.

 

Note: The limit price on a stop limit order should be aggressive enough to ensure that once the stop limit is triggered, the order is fully executed.

For example, if you are buying, you would want to set your stop price somewhat lower than your limit price. For selling, you would want to set your stop price somewhat higher than your limit price.

Risk Warning: Limited order types. Customers should be aware that only market orders, limit orders, and stop limit orders are available on the platform. Stop limit orders can be used to provide some protection against trading losses as such orders are only filled when the stop price is reached, and then only at or better than a specified price. It is important to note that the closer the stop price is to the specified price, the greater the possibility that the order will not be fully filled. This should be contrasted with stop market orders, (which are not available on the platform), which would be fully filled from the available liquidity.

Once you have placed your stop limit order, you can view the order in your Order page.

Limit order example

The market price for BTC is US$75,000. You set your limit price at US$90,000 to sell BTC. The order will be executed when BTC reaches US$90,000 or higher.

Stop limit order example

The current market price for BTC is US$75,000. You expect the value of BTC may depreciate, but you are willing to hold onto the asset until it falls to a certain price. You set your stop price at US$60,000 and a limit price at US$55,000 to sell BTC. A limit order will be created when BTC reaches US$60,000.

However, if the market continues to move downward, (the price becomes lower than US$55,000), your order may not be completely filled. The stop limit order cannot completely offer downside protection that you would usually get from a stop market order, (which is not available on the platform).

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