Bitfinex offers several order types to give you the tools you need to execute your trading strategy successfully:
- Trailing Stop
- Fill or Kill (FOK)
- One Cancels Other (OCO) (video)
- Post-Only Limit
- Scaled (video)
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.
For example, if the current market price is 250 and I'd like to buy lower than that at 249, the trader would place a limit buy order at 249. If the market reaches 249 and a seller matches my bid, my 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 the certainty of execution is a priority over the price of execution. The downside of market orders is that the trader has less control over the execution price. Instead, the trader prefers to execute the trade immediately at whatever is the current best price they can get.
A stop order is used to trigger a sell when the market drops to your trigger price, or used to trigger a 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.
For example, if the current market price is 250 the trader 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.
A trailing stop order can be set to execute once the market goes against you by a defined price, called the price difference. When margin trading, a trailing stop sell order can be used to protect profit.
For example, if the trader is in a long position and the current market price is 250 after a quick rise from 225, a trader might set a trailing stop with a 5 price distance. This will create a sell order at 245. But what makes this different than a normal stop order is that if the price continues to rise to 275, the stop rises with the price, always staying 5 behind the highest price reached - in this case 270.
The stop price trails behind the market price by the amount specified as price difference and allows for a stop to adjust to the market if the market moves in a profitable direction.
Fill or Kill (FOK)
A "fill or kill" order is a limit order that must be filled in its entirety or canceled (killed). The purpose of a fill or kill order is to ensure that a position is entered at a desired price.
One Cancels Other (OCO)
The "one cancels other" 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. A "one cancels the other" 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).
For example, if the current price is 250 and the trader wants a stop loss at 245 and a a limit order at 260. If the market reaches 245 your stop order will execute thus canceling your order at 260. If the market reaches 260 before 245 your limit order will execute thus canceling out your order at 245.
Note: If you manually cancel one of the OCO orders pair, you have to manually cancel the other one. An OCO order is only automatically canceled if the other order is partially or fully executed.
A hidden order is an order which does not appear in the order book, and thus doesn't influence other market participants. See the fees page for minimum size and fee applicable.
The "post-only" limit order type ensures the 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. More information about fees.
The "scaled order" tool is an algorithm for creating multiple limit orders over a given price range. This allows traders to spend less time entering orders and more time focusing on their strategy.