Crypto futures order types are instructions traders use to buy or sell crypto futures contracts at specific prices or under particular conditions.

They help traders execute their trades effectively and manage risk in the volatile crypto market. There are several types of crypto futures order types, such as:

Different crypto futures exchanges like Bybit or BingX may offer different order types, but some of the most common ones are:

  • Market order: An order executed immediately at the best available market price. This type of order is suitable for traders who want to enter or exit a position quickly without waiting for a specific price level.
  • Limit order: An order that is executed at a specified price or better. This type of order is suitable for traders who want to buy or sell at a specific price or to set a target profit or stop loss level.
  • Stop order: An order that is triggered by a specific price level and then executed as a market order. This type of order is suitable for traders who want to protect their positions from adverse price movements or to enter a position when the price breaks out of a particular range.
  • Stop-limit order: An order that is triggered by a specific price level and then executed as a limit order. This type of order is suitable for traders who want more control over the execution price of their stop orders or to avoid slippage in volatile markets.
  • Trailing stop order: An order that follows the market price by a certain distance and is executed as a market order when the price reverses by a specified amount. This type of order suits traders who want to lock in their profits as the market moves in their favor or cut their losses as the market moves against them.
  • Conditional order: An order that is executed only if a specific condition is met, such as the price reaching a certain level, the volume exceeding a certain amount, or another order being filled. This type of order is suitable for traders who want to automate their trading strategies based on predefined scenarios.
  • Post-only order: An order executed only if it adds liquidity to the order book, meaning that it does not match any existing orders. This type of order is suitable for traders who want to avoid paying taker fees and earn maker rebates.
  • Fill-or-kill order: An order that is executed immediately and wholly or canceled if it cannot be filled. This type of order suits traders who want to execute large orders without partial fills or slippage.
  • Iceberg order: An order divided into smaller chunks and executed gradually, hiding the total order size from the market. This type of order is suitable for traders who want to avoid revealing their intentions and influencing the market price.

Each Order Type Explained with an Example

Sure, I will explain each order type with an example. Please note that the prices and quantities are hypothetical and do not reflect the actual market conditions.

  • Market order: Suppose you want to buy 10 BTC futures contracts at the current market price. You place a market order that is executed immediately at the best available price. For example, your order will be filled if the best ask price is $50,000. You will pay $500,000 for the ten contracts, plus any fees or commissions. You can place a market order, which will be filled as soon as possible, regardless of the price. However, this also means that you may experience slippage, which is the difference between the expected price and the actual price of the order execution. Slippage can be positive or negative, depending on the market direction and liquidity.
  • Limit order: Suppose you want to sell 10 BTC futures contracts at a higher price than the current market price. You place a limit order and specify the price you want to sell. For example, if you want to sell at $51,000, your order will be placed on the order book and wait for a buyer to match your price. Your order will be executed only if the market price reaches or exceeds $51,000. You will receive $510,000 for the ten contracts, minus any fees or commissions.
  • Stop order: Suppose you want to buy 10 BTC futures contracts if the market price exceeds a certain level. You place a stop order and specify the trigger price. For example, if you want to buy when the price reaches $52,000, your order will be activated when the market price hits or surpasses $52,000. Your order will then be executed as a market order at the best price. For example, your order will be filled if the best ask price is $52,100. You will pay $521,000 for the ten contracts, plus any fees or commissions.
  • Stop-limit order: Suppose you want to buy 10 BTC futures contracts if the market price breaks above a certain level, but you also want to limit the maximum price you are willing to pay. You place a stop-limit order and specify the trigger and limit prices. For example, if you want to buy when the price reaches $52,000 but not more than $52,500, your order will be activated when the market price hits or surpasses $52,000. Your order will then be executed as a limit order at the specified price or better. For example, your order will be filled if the best ask price is $52,100. You will pay $521,000 for the ten contracts, plus any fees or commissions. However, if the best ask price is $52,600, your order will not be filled, as it exceeds your limit price.
  • Trailing stop order: Suppose you want to sell 10 BTC futures contracts, lock in your profits as the market price rises, and protect yourself from a sudden price drop. You place a trailing stop order and specify the trailing amount. For example, if you want to sell when the price falls by $1,000 from the highest price reached, your order will follow the market price by $1,000 and adjust itself automatically. For example, if the market price rises from $50,000 to $55,000, your order will move from $49,000 to $54,000. If the market price drops to $53,000, your order will be triggered and executed as a market order at the best available price. For example, your order will be filled if the best bid price is $52,900. You will receive $529,000 for the ten contracts, minus any fees or commissions.
  • Conditional order: Suppose you want to buy 10 BTC futures contracts if the market volume exceeds a certain amount, indicating high liquidity and activity. You place a conditional order and specify the condition. For example, if you want to buy when the volume reaches 1,000 contracts, your order will be executed only if that condition is met. Your order will be completed as a market order at the best price. For example, your order will be filled if the best ask price is $50,000. You will pay $500,000 for the ten contracts, plus any fees or commissions.
  • Post-only order: Suppose you want to buy 10 BTC futures contracts and earn a maker rebate for adding liquidity to the order book. You place a post-only order and specify the price you want to buy at. For example, if you want to buy at $49,500, your order will be placed on the order book and wait for a seller to match your price. Your order will be executed only if it does not correspond with existing orders. For example, if the best bid price is $49,400, your order will be placed above it. You will pay $495,000 for the ten contracts, minus any fees or commissions. However, if the best bid price is $49,600, your order will not be placed, as it would match an existing order and remove liquidity from the order book.
  • Fill-or-kill order: Suppose you want to sell 10 BTC futures contracts at a specific price and do not want to accept partial fills or slippage. You place a fill-or-kill order and specify the price you want to sell at. For example, if you want to sell at $50,500, your order will be executed immediately and wholly or canceled if it cannot be filled. For instance, if there are enough buyers at $50,500, your order will be served at that price. You will receive $505,000 for the ten contracts, minus any fees or commissions. However, if there are not enough buyers at $50,500, your order will be canceled, and you will not sell any contracts.
  • Iceberg order: Suppose you want to buy 100 BTC futures contracts at a specific price but do not want to reveal your full order size to the market and influence the price. You place an iceberg order and specify the price you want to buy at and the display quantity. For example, if you buy at $50,000 and display only ten contracts at a time, your order will be divided into ten chunks of 10 contracts each and executed gradually. For example, if the best ask price is $50,000, your first chunk of 10 contracts will be filled. You will pay $500,000 for the first chunk, plus any fees or commissions. The next chunk of 10 contracts will be displayed on the order book at $50,000 until your entire order is filled. The market will only see ten contracts at a time, not your total order size of 100 contracts.

Crypto futures order types are essential for traders who want to execute their strategies effectively and manage their risks in the volatile crypto market.

By understanding the differences and advantages of each order type, traders can optimize their entry and exit points, protect their profits, and limit their losses on various crypto trading platforms.

Whether using market orders, limit orders, or stop orders, traders should always be aware of the market conditions, liquidity, and slippage that may affect their order execution.

To get further idea on how these order types of work, you can have a look at these successful trading case studies.

Nathan
Latest posts by Nathan (see all)