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Buy 0.1 BTC now, or wait for your price?Market order70,001.0you buy here70,000.0best bidFills nowat 70,001.0, the best askTakerLimit order70,001.0best ask70,000.0best bid69,990.0your buyWaits in the bookfills only at 69,990.0Maker
Buy 0.1 BTC now,or wait for your price?Market orderTaker70,001.0you buy here70,000.0best bidFills nowat 70,001.0, the best askLimit orderMaker70,001.0best ask70,000.0best bid69,990.0your buyWaits in the bookfills only at 69,990.0

A market order takes the price now. A limit order waits for yours.

Market and limit orders

A market order trades at once against the book. A limit order waits in the book at the price you set.

Lesson 2 of 75 min3 parts

Updated . Cryptathon rules checked on .

A market order trades at once at the best prices in the book and pays the taker fee. A limit order waits in the book at the price you set and pays the maker fee, but it may never fill. On Cryptathon a market order fills no further than 1% from the mark price, and every limit order is post-only.

By the end, you can

  1. 1Work out where a market order fills and how far it may go
  2. 2Say when a limit order fills and when to use each order
  3. 3Work out what is left after a partial fill

1 of 3

When does a market order fill?

A market order trades at once at the best prices in the book. A market buy trades with the best ask, and a market sell trades with the best bid. Any size available inside the price band fills at once, but you do not choose the price.

On Cryptathon a market order cannot fill too far from the mark price. A buy fills no higher than 1% above the mark price, and a sell fills no lower than 1% below it. This is the price band. On Cryptathon any part that cannot fill inside the band is cancelled.

Worked example

A market buy

The best ask is 70,001.0 with 0.1 BTC, and the mark price is 70,000.0. You buy 0.1 BTC at market. Where does it fill, and what is the highest price it could fill at?

  1. 1
    Fill at the best askAll 0.1 BTC waits at the best ask, so the whole order fills there.
    0.1 × 70,001.0 = 7,000.1 USDT
  2. 2
    Find the price capThe mark price plus 1% of it.
    70,000.0 + 70,000.0 × 1% = 70,700 USDT
  3. 3
    Compare the fill with the capThe fill was far inside the band.
    70,700 − 70,001.0 = 699 USDT

AnswerYou buy 0.1 BTC at 70,001.0, a position of 7,000.1 USDT. The order could not fill above 70,700.

Mark 70,000−1%+1%Sells fill no lower than69,300Buys fill no higher than70,700
Mark 70,000−1%+1%Sells fillno lower than69,300Buys fillno higher than70,700
Figure 1 With the mark price at 70,000, a market buy fills no higher than 70,700 and a market sell no lower than 69,300. That is 1% each way.
Your turn The mark price of ETH is 3,000 USDT. You sell ETH at market. What is the lowest price it can fill at?
  1. 2,999 USDT

    That is only 1 USDT lower. The band is 1% of the mark price: 3,000 × 1% = 30 USDT.

  2. 2,970 USDT

    Right. 3,000 × 1% = 30 USDT, and 3,000 − 30 = 2,970.

  3. 3,030 USDT

    That is the highest a market buy can fill at. A sell has a floor below the mark price.

  4. There is no lowest price

    On Cryptathon a market order stays within 1% of the mark price.

Show the answer

B: 2,970 USDT. 3,000 × 1% = 30 USDT, and 3,000 − 30 = 2,970.

2 of 3

When does a limit order fill?

A limit order trades only at the price you set. On Cryptathon a limit order waits in the book until it fills or you cancel it, and it never trades at once (post-only).

So a limit buy goes in below the best ask, and a limit sell goes in above the best bid. It fills only when another trader's order comes to your price. Until then it waits in the book with the other bids or asks.

Worked example

A limit buy that waits

The best ask is 70,001.0. You place a limit buy for 0.1 BTC at 69,990.0. When does it fill, and what do you pay?

  1. 1
    Find the gap to the best askYour price is 11 USDT under what sellers ask now.
    70,001.0 − 69,990.0 = 11 USDT
  2. 2
    Count the ticksSellers must come down 22 ticks of 0.5 USDT to meet you.
    11 ÷ 0.5 = 22
  3. 3
    Work out the cost if it fillsIt fills at your price.
    0.1 × 69,990.0 = 6,999 USDT

AnswerIt fills only when a seller sells at 69,990.0. Then you hold a 0.1 BTC position bought at 69,990.0, a position of 6,999 USDT. If the price never comes down, it never fills.

BTC price, USDT70,01070,00069,99069,980Your limit buy: 69,990.0Price nowFills here
BTC price, USDT70,01070,00069,99069,980Your limit buy: 69,990.0Price nowFills here
Figure 2 Your limit buy waits at 69,990.0 while the price moves above it. It fills only when the price comes down to your level.

When to use each:

  • A market order, when it matters more to trade now than to get an exact price.
  • A limit order, when the price matters more than the time, and you can accept that it may never fill.
Your turn The best bid for BTC is 70,000.0 and the best ask is 70,001.0. You place a limit sell at 70,010.0. What happens?
  1. It sells at once at 70,000.0

    A limit order never sells below your price, and on Cryptathon it never trades at once.

  2. It waits until a buyer pays 70,010.0

    Right. Nobody pays 70,010.0 now, so your order waits in the book at that price.

  3. It sells at once at 70,010.0

    The best bid is 70,000.0, so nobody buys at 70,010.0 now. The order waits.

  4. It turns into a market order

    A limit order stays a limit order until it fills or you cancel it.

Show the answer

B: It waits until a buyer pays 70,010.0. Nobody pays 70,010.0 now, so your order waits in the book at that price.

3 of 3

What is a partial fill?

An order does not have to fill all at once. When only part of your size can trade at your price, that part fills. The rest of a limit order keeps its place in the book and waits. This is a partial fill.

Each fill adds to your position as it happens. A cancel removes only the part that has not filled yet.

Worked example

Part of a limit buy fills

Your limit buy is for 0.3 BTC at 69,990.0. A seller sells 0.12 BTC at that price. What do you hold now, and what still waits?

  1. 1
    Find what is leftThis part keeps waiting in the book.
    0.3 − 0.12 = 0.18 BTC
  2. 2
    Value the part that filledThis is your position now.
    0.12 × 69,990.0 = 8,398.8 USDT
  3. 3
    Value the part that waitsIt joins your position only if it fills.
    0.18 × 69,990.0 = 12,598.2 USDT

AnswerYou hold a 0.12 BTC position, worth 8,398.8 USDT. Another 0.18 BTC waits at 69,990.0. You can let it wait or cancel it.

Your limit buy: 0.3 BTC at 69,990.0Filled 0.12Waits 0.180.3 − 0.12 = 0.18 BTC still in the book
Your limit buy:0.3 BTC at 69,990.0Filled 0.12Waits 0.180.3 − 0.12 = 0.18 BTCstill in the book
Figure 3 A limit buy for 0.3 BTC. A seller sold 0.12 BTC at your price, so 0.12 BTC is filled and 0.18 BTC still waits in the book.
Your turn Your limit sell for 0.5 BTC has 0.2 BTC filled. You cancel the order. What happens?
  1. The 0.2 BTC fill stays, and the 0.3 BTC left is removed

    Right. A cancel removes only the part that has not filled.

  2. Both parts are undone

    A fill is a trade that has happened. A cancel cannot undo it.

  3. The rest fills first, then the order closes

    A cancel removes what is left. It does not fill it.

  4. Nothing, because a part-filled order cannot be cancelled

    The part that has not filled can still be cancelled.

Show the answer

A: The 0.2 BTC fill stays, and the 0.3 BTC left is removed. A cancel removes only the part that has not filled.

Common questions

What happens if you place a limit buy above the best ask?

On Cryptathon it is rejected. A limit buy at or above the best ask would trade at once, and a post-only limit order that would trade at once is rejected. So with the best ask at 70,001.0, a limit buy at 70,005.0 does not fill and does not wait. To buy now, use a market order. To wait for a lower price, set the limit price below the best ask.

Does a limit order guarantee your price?

It fixes the price, not the fill. A limit buy at 69,990.0 never pays more than 69,990.0. On Cryptathon it waits in the book, so when it fills, it fills at exactly that price. But if sellers never come down to 69,990.0, nothing fills, and the move you wanted can happen without you.

Can a market order fill only in part?

Yes. A market order takes what waits in the book inside the price band. On Cryptathon any part that cannot fill inside the band is cancelled. For example, with the mark price at 150.00, a SOL market buy can fill up to 151.50. If only 40 SOL of asks wait up to that price and you buy 60 SOL, 40 SOL fill and the other 20 SOL are cancelled.

Check yourself

Three questions on the whole lesson.

Question 1 of 3 Which order tries to trade at once against the orders in the book?
  1. A market order

    Right. A market order trades at once at the best prices in the book, inside the price band.

  2. A limit order at the best ask

    On Cryptathon a limit order never trades at once, even at the best ask.

  3. A limit order far below the best ask

    It waits until sellers come down to it, which may never happen.

  4. Any order, they all trade at once

    Only a market order tries to trade at once. A limit order waits.

Show the answer

A: A market order. A market order trades at once at the best prices in the book, inside the price band.

Question 2 of 3 The mark price is 2,000 USDT. Which fill can a market buy not get?
  1. 2,000 USDT

    That is the mark price itself, inside the band.

  2. 2,015 USDT

    That is 0.75% above the mark price, inside the 1% band.

  3. 2,019 USDT

    The cap is 2,000 + 20 = 2,020, so 2,019 is just inside it.

  4. 2,025 USDT

    Right. 2,000 × 1% = 20, so the cap is 2,020, and 2,025 is above it.

Show the answer

D: 2,025 USDT. 2,000 × 1% = 20, so the cap is 2,020, and 2,025 is above it.

Question 3 of 3 Your limit buy for 2.0 SOL at 150.00 has 0.7 SOL filled. How much still waits?
  1. 0.7 SOL

    That is the part that has filled. Take it away from the 2.0 SOL.

  2. 2.7 SOL

    You added the fill. Take it away instead: 2.0 − 0.7.

  3. 1.3 SOL

    Right. 2.0 − 0.7 = 1.3 SOL still waits at 150.00.

  4. 195 USDT

    That is what the 1.3 SOL is worth at 150.00. The question asks how much SOL.

Show the answer

C: 1.3 SOL. 2.0 − 0.7 = 1.3 SOL still waits at 150.00.

What to remember

  1. When does a market order fill?A market order trades at once at the best prices, and never more than 1% from the mark price.
  2. When does a limit order fill?A limit order fixes the price but not the time, and it may never fill.
  3. What is a partial fill?A fill can come in parts; what has filled stays, and the rest waits until it fills or you cancel it.
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