Bitfinex offers several order types via the Order Form box to give you the tools necessary to execute your trading strategy successfully. Additionally, there are order “options” as well:
- Trailing Stop
- Fill or Kill
- Immediate or Cancel
- Scaled (video)
- One Cancels Other (OCO) (video)
- Post-Only Limit
A limit order is one of the most basic order types. It allows the trader to specify a price and amount they would like to buy or sell.
Example: If the current market price is 250 and I want to buy lower than that at 249, then I would place a limit buy order at 249. If the market reaches 249 and a seller’s ask matches with my bid, my limit order will be executed at 249.
A market order is an order type that executes immediately against the best price available. As long as there are willing sellers and buyers, market orders are filled. A market sell will match the best available bids on the order book, and a market buy will match against the best available asks on the order book.
Market orders are often used when rapid execution is prioritized over the price at which the order executes. When placing this order, the trader prefers the trade to happen immediately at the current best price available.
A stop order is used to trigger a market sell when the market drops to your trigger price, or used to trigger a market buy if the market rises to your trigger price. This is often used as a stop loss order if the market is moving against an open margin position. Stop orders will fully execute as a market order once the trigger price is reached.
Example: If the current market price is 250, the trader in a long position might want to sell if the price reaches 245. A stop sell at 245 will be used in this case.
If shorting, a trader would place a stop buy above the current price. This would mean that if the market goes against their short (up) they can cut their losses by buying to close or reduce their short position.
Example: If the current market price is 250, the trader in a short position might want to buy if the price reaches 255. A stop buy at 255 will be used in this case.
A stop-limit order executes as a limit order within a specific price range (buy or sell limit price or better) and not as a market order. With a stop-limit, the trader sets a stop price at which the order is triggered and a limit price at which the order may be filled. The order will only execute between the stop and the limit as long as matching bids or asks are available on the book. If the market price surpasses the limit price, the order may not be entirely filled.
Once the stop of a stop-limit order is triggered, the limit order is automatically added to the book. If the market price does not reach the stop price, the order will not be triggered and will remain unfilled. If the stop is triggered and the limit order is placed, but the market price does not reach the limit price, the order will also go unfilled.
If the market price is moving quickly enough and gaps above the limit price, there may not be enough matching offers available between your stop and limit to fulfill the order.
Example: If a trader would like to buy once the market price reaches 250, but not pay more than 252, then a stop price of 250 and limit price of 252 will be specified at the same time using a stop-limit order. If the market price reaches 250, the order is triggered and will match the best available asks up to 252. If the market price moves to 252.01 or above, then the order may go partially unfilled due to the limit price.
A trailing stop order provides flexibility over a stop order by executing once the market goes against you by a defined price, called the price distance. When margin trading, a trailing stop sell order can be used to protect profit.
Example: If the trader is in a long position and the current market price is 250 after a quick rise from 225, a trader can set a trailing stop with a price distance of 5. This will create a sell stop order at 245. As opposed to a normal stop order, if the market price continues to rise to 275, then the trailing stop rises accordingly, always staying 5 behind the market price; rising to 270 in this example.
The stop price trails behind the market price by the amount specified as price distance and allows for a stop to adjust to the market if the market moves in a profitable direction. If the stop is triggered, a market order is placed.
Fill or Kill (FOK)
A "fill or kill" order is a limit order that must be filled immediately in its entirety or it is canceled (killed). The purpose of a fill or kill order is to ensure that a position is entered instantly and at a specific price.
The scaled order tool is an algorithm designed to allow traders to spend less time entering orders and more time focusing on their strategy. The algorithm automatically creates multiple limit orders across a user-determined price range. This tool also provides control over the diversity and distribution of orders within the price range.
One Cancels Other (OCO)
The one cancels other order option allows you to place a pair of orders stipulating that if one order is executed fully or partially, then the other is automatically canceled. An OCO order combines a stop order with a limit order. This option allows you to place both take profit and stop loss targets for your position (only for limit orders).
Example: If the market price is 250 and the trader wants a stop order at 245 and a limit order at 260, then a OCO order may be appropriate. If the market reaches 245, the stop order will trigger a market order and cancel the limit order at 260. If the market reaches 260 before 245, the limit order will execute and cancel the stop order at 245.
Note: If you manually cancel one of the OCO orders; i.e., the stop or the limit, you must also manually cancel the other one. An OCO order is only automatically canceled if the other order is partially or fully executed by market price movement.
The hidden order option ensures an order does not appear in the order book; thus does not influence other market participants. See the fees page for minimum size and applicable fee.
The post-only limit order option ensures the limit order will be added to the order book and not match with a pre-existing order. If your order would cause a match with a pre-existing order, your post-only limit order will be canceled. This ensures that you will pay the maker fee and not the taker fee. Visit the fees page for more information.
Immediate or Cancel
An Immediate Or Cancel (IOC) order requires all or part of the order to be executed immediately, and any unfilled parts of the order are canceled. Partial fills are accepted with this type of order duration, unlike a fill-or-kill order, which must be filled immediately in its entirety or be canceled.
The Reduce Only option allows you to set buy and sell orders intended to only reduce a current position, and not open an opposite long or short worth more than the existing value of your leveraged assets. This essentially means that you will not be able to execute more than you currently have in your position, allowing you to trade without running the risk of over-exposing your assets.
Example: If you have a long position of 300 EOS/USD, opened at 7.7381 USD/EOS, with a current market price of 7.7280 USD. As the ticker price goes up, and your purpose is to take profits out when it has risen to your expected threshold, you prepare for the forecasted scenario and place a limit sell order at 8.2 USD per unit, for the calculated maximum value that your assets can support, of 608.9984 EOS. Having the REDUCE-ONLY mark applied to the order will only allow you to execute 300 EOS, as that would be the maximum amount of units that can be traded without reversing the course of your position.