Spot Order Types
AZX Spot Trading supports two primary order types: Limit Orders and Market Orders. These order types allow users to execute trades based on their preferred pricing strategy and execution urgency.
Available Order Types
In spot markets, users can place:
Limit Orders
Market Orders
Each order type serves a different trading purpose and offers distinct advantages depending on market conditions.
Limit Orders
A limit order allows a trader to specify the exact price at which they are willing to buy or sell an asset.
A buy limit order will execute at the specified price or lower
A sell limit order will execute at the specified price or higher
Limit orders are added to the order book and will only be executed when the market reaches the specified price.
Use Cases for Limit Orders
Limit orders are commonly used to:
Enter the market at a specific desired price
Reduce trading costs by acting as a maker
Gradually accumulate or distribute assets
Partially or fully execute trades as liquidity becomes available
Because execution depends on market conditions, limit orders are not guaranteed to be filled.
Market Orders
A market order is an instruction to immediately buy or sell a specified quantity of an asset at the best available prices in the order book.
Market orders prioritize execution speed over price certainty.
Key Characteristics of Market Orders
Immediate execution, provided sufficient liquidity exists
Execution price is determined by current market depth
Final execution price may differ from the last traded price due to slippage
Market orders are particularly useful when rapid execution is required.
Common Use Cases
Market orders are often used when:
Entering or exiting a position quickly
Trading in fast-moving or highly volatile markets
Ensuring execution is more important than obtaining a specific price
Execution Considerations
When placing any order in the spot market, traders should consider:
Available liquidity in the order book
Potential price slippage for larger market orders
Market volatility at the time of execution
Understanding how different order types behave under varying market conditions can help traders execute more effectively.
Summary
Limit orders offer price control and potential cost savings but may not be filled immediately. Market orders ensure rapid execution but do not guarantee a specific price.
By selecting the appropriate order type, traders can align their execution strategy with their risk tolerance and market outlook.
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