What Are Limit Orders and Market Orders?
When placing a buy or sell order in trading, the most commonly used order types are limit orders and market orders. You can choose the order type according to your needs. Currently, spot trading only supports market orders and limit orders.
1. Limit Order
Definition: A limit order specifies a price and quantity (the order enters the order book after placement).
A limit order allows users to set the order quantity and the maximum acceptable purchase price or minimum acceptable selling price. When the market price meets the user's set conditions, the system will execute the order at the best price within the limit range.
Example 1: If the current BTC market price is 53,000 USDT and you want to buy at a cheaper price of 52,900 USDT, you can place a limit order at 52,900. Once the market price drops to 52,900 USDT or lower, your order will be automatically executed.
2. Market Order
Definition: A market order buys or sells at the best available price in the market.
A market order allows users to execute a trade immediately at the current best market price, ensuring fast transactions.
Example 1: If the latest BTC price is 53,000 USDT and you want to buy BTC immediately at market price, you can place a market order and specify the total amount, such as 40 USDT. The order will be executed immediately. In a highly volatile market, the execution price may not be exactly 53,000 USDT—it could be higher or lower depending on real-time market fluctuations.
Differences Between Limit Orders and Market Orders:
- A limit order requires manual input of the desired transaction price, whereas a market order does not require a price and executes immediately at the current market rate.
- A single market order cannot exceed a total value of 100,000 USDT. If it does, the order will fail.
- Limit orders do not freeze trading fees before execution, while market orders will have trading fees temporarily frozen until the order is completed.