Order Types

What types of orders exist?

1. Market Orders 🎯

A market order is an order to buy or sell a contract immediately at the current market price. It prioritizes speed over price, meaning it will fill as soon as possible regardless of the price 🛒

• When to Use: If you want to enter or exit a position quickly, without worrying about small price fluctuations.

• Advantages:

  • Speed: Market orders execute immediately.

  • Simplicity: Ideal for traders who need instant execution, especially during high volatility.

• Disadvantages:

  • Price Slippage: In fast-moving markets, the execution price may differ significantly from the last traded price.

2. Limit Orders 🔗

A limit order allows you to set the price at which you want to buy or sell a contract. The order will only be executed if the market price reaches your specified limit price or better.

• When to Use: If you want to ensure you get a specific price or better when buying or selling.

• Advantages:

  • Price Control: You control the maximum price you are willing to pay or the minimum price you want to receive.

  • Reduced Costs: Limit orders often have lower fees since they add liquidity to the order book.

• Disadvantages:

  • No Guarantee of Execution: If the market does not reach your limit price, the order may remain unfilled.

3. Stop-Loss Orders (Not Available on RexBit Testnet) 🎁

A stop-loss order is designed to automatically close a position to limit losses if the market moves against you. When a certain price level is hit, it converts into a market order.

• Purpose: Protect your position by minimizing losses if the market moves unfavorably.

• Example: If you are long on Bitcoin at $20,000, you might set a stop-loss order at $18,000 to exit the position and limit your losses if the price drops.

4. Take-Profit Orders (Not Available on RexBit Testnet) 🎁

A take-profit order automatically closes your position once a specified profit level is reached. It is used to lock in gains without needing to constantly monitor the market.

• Purpose: Secure profits by closing a trade once a target price is reached.

• Example: If you are long on Bitcoin at $20,000 and expect it to reach $25,000, you might set a take-profit order at $25,000 to capture your gains.

Orders Available on RexBit Testnet 🎢

On the RexBit testnet, we will be focusing on the following two order types:

1. Market Orders: Execute instantly at the current market price, making them suitable for traders looking for quick entry or exit without price concerns.

2. Limit Orders: Execute at a set price or better, allowing traders to manage their entry and exit prices effectively.

These two types of orders are selected for the testnet to provide users with a simple yet effective way to interact with the market, balancing execution speed and price control.