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Explanation of Limit Orders, Market Orders, and Stop Orders
Published on: 2025/08/17 12:58Last Update: 2025/08/17 12:58

Limit Order, Market Order, and Trigger Order Explanation

Limit Order

A limit order allows traders to set the minimum price at which they are willing to sell or the maximum price they are willing to buy. Once the market price reaches the set limit price, the order will be matched and executed automatically.

  • Limit order rules:
    Orders are matched based on price priority; if prices are the same, time priority applies.

Note:
Limit orders follow the logic of buying low and selling high.
If a buy order is placed at a price higher than the current market price, or a sell order is placed lower than the market price (i.e., buying high or selling low), it will be filled immediately at the best available market price.

 

Market Order

A market order is executed immediately at the best available market price.

Note:
When a trader places a large market order, and the opposite side of the order book doesn't have enough quantity, the system will match with multiple levels (Level 1, 2, 3, etc.) until the total amount is filled.
The average execution price is calculated as:

Average Price = (Price₁ × Qty₁ + Price₂ × Qty₂ + ... + Priceₙ × Qtyₙ) / Total Quantity

Due to different prices at each level, the average price may deviate from the current market price—this is normal.

Tip:
Before placing a market order, review the order book depth to avoid significant price impact (also known as “price slippage” or “wicks”).

 

Trigger Order (Planned Order)

A trigger order is only activated when the market reaches the preset trigger price.
The trader sets a trigger price that, when reached, will activate a limit or market order based on the trader’s choice.

  • Before activation, trigger orders do not require margin.

  • If there is insufficient margin at the time of triggering, the order will fail and be automatically canceled.

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Explanation of Limit Orders, Market Orders, and Stop Orders
Published on: 2025/08/17 12:58Last Update: 2025/08/17 12:58

Limit Order, Market Order, and Trigger Order Explanation

Limit Order

A limit order allows traders to set the minimum price at which they are willing to sell or the maximum price they are willing to buy. Once the market price reaches the set limit price, the order will be matched and executed automatically.

  • Limit order rules:
    Orders are matched based on price priority; if prices are the same, time priority applies.

Note:
Limit orders follow the logic of buying low and selling high.
If a buy order is placed at a price higher than the current market price, or a sell order is placed lower than the market price (i.e., buying high or selling low), it will be filled immediately at the best available market price.

 

Market Order

A market order is executed immediately at the best available market price.

Note:
When a trader places a large market order, and the opposite side of the order book doesn't have enough quantity, the system will match with multiple levels (Level 1, 2, 3, etc.) until the total amount is filled.
The average execution price is calculated as:

Average Price = (Price₁ × Qty₁ + Price₂ × Qty₂ + ... + Priceₙ × Qtyₙ) / Total Quantity

Due to different prices at each level, the average price may deviate from the current market price—this is normal.

Tip:
Before placing a market order, review the order book depth to avoid significant price impact (also known as “price slippage” or “wicks”).

 

Trigger Order (Planned Order)

A trigger order is only activated when the market reaches the preset trigger price.
The trader sets a trigger price that, when reached, will activate a limit or market order based on the trader’s choice.

  • Before activation, trigger orders do not require margin.

  • If there is insufficient margin at the time of triggering, the order will fail and be automatically canceled.

Was this article helpful?
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