Welcome to OKX guide on market and limit orders in the world of cryptocurrency trading. In this article, we'll explain the key differences between market and limit orders.
Market orders
What are market orders?
A market order is an order to buy or sell a cryptocurrency at the best available price in the current market. Essentially, it allows you to buy or sell a cryptocurrency as soon as possible, regardless of the price.
Market orders are usually executed almost immediately and are ideal for traders who want to buy or sell a cryptocurrency as quickly as possible. When executing a market order, you are considered a market "taker" and your order is subject to taker fees.
Market order example
If the current market price is $100, a buy or sell market order will be filled at around $100.
Limit orders
What are limit orders?
A limit order is an order to buy or sell a cryptocurrency at a specific price or better. Unlike market orders, limit orders allow you to specify the exact price at which you want to buy or sell a cryptocurrency.
Limit orders are ideal for traders who want more control over their trades and are willing to wait for the right price. When executing a limit order, you are generally considered a market 'maker' and your order is subject to maker fees.
However, there are scenarios where a limit order is considered a taker order, such as when the limit order is executed immediately.
Limit order examples
Buy order
If the current market price is $100, a buy limit order priced at $80 will only be executed when the market price drops to $80 or below.
Sell order
If the current market price is $100, a sell limit order priced at $120 will only be executed when the market price rises to $120 or above.
Market order vs limit order
Understanding the differences between market and limit orders is crucial for any beginner trader. Market orders offer quick execution and ease of use, while limit orders allow for greater control over price and, therefore, the potential for better prices.
It's important to consider your trading strategy and goals when deciding which type of order to use. And as always, it's also important to do your due diligence and carefully consider the risks before making any trades.
