MCS has the following basic order types.
Market Order
A Market Order is an order to buy or sell at the best available price in the market and is filled immediately. As long as there are willing sellers and buyers in the market, the Market Orders are likely to be filled. However, traders should watch out for the change in price as the order execution is guaranteed while the execution price can be volatile. For Market Orders, taker fees will apply.
Limit Order
A Limit Order is a way of trading at the price specified by the trader. Traders can specify the minimum price they want to buy if they want to go long, and the highest price they want to sell when going short. An order is placed only when it reaches the specified price, which is the price set by the trader, and it may take longer until the order is filled if there are no orders available for the particular price. Due to this, long Limit Orders and short Limit Orders are usually set at a price lower and higher than the last traded price respectively. On the other hand, if the Limit Order price is set above or below respectively, then the order will be filled against the best available market price until it reaches the specified price. The unfilled contracts will remain in the order book as a Limit Order.
When the Limit Order is submitted, it will be placed in the order book until it is matched or canceled. However, the way the order is filled may differ according to the Time in Force* option which is often used in variation with the Market Order. Therefore you can use the Limit Order to partially fill a Market Order and leave the remaining unfilled orders as Limit Orders.
Post-Only Order, an option for Limit Order
A Post-Only Order is an option that ensures the orders are placed in the order book as a maker order. Therefore the traders will be guaranteed to receive a maker rebate when the order is eventually executed. Furthermore, traders that aim to avoid paying Taker Fees can utilize this option as orders that are expected to immediately execute upon order placement will be automatically canceled or fail to execute while the post-only order is checked.
<Post-Only Order Example>
In a highly volatile market like a breakout, David tries to go long BTC/USDT contracts at 9000 USDT when the current best ask price in the order book is 9005 USDT but quickly moved to 8990 USDT when the Limit Order is finally placed.
Since the best ask price has changed to a lower price, a better quote of 8990 USDT for going long in comparison to the order limit price of 9000 USDT, the order will be automatically rejected from the engine and order book, hence canceled. This implies that with the post-only option, David will only be exposed to maker rebates and does not have to pay any taker fees that were unintended.
If the post-only order was not checked, the order will be immediately executed as a taker order from the best available ask price until it reaches (if it reaches) the order limit price of 9000 USDT. Therefore this has resulted in David paying a taker fee when he was, in fact, expecting to receive a maker rebate.
*Note: The GoodTillCancel Order is implied in this example. The order may differ depending on the Time in Force strategy used.
Conditional Order
Conditional Orders only are triggered if the pre-sets are satisfied. The trader must set the trigger price to either the Last Traded Price, Mark Price or Index Price. A Conditional Order is best utilized when traders desire advanced strategies that can automate the trade depending on the change in price. Conditional Orders contain the following orders.
Conditional Market Order
Conditional Market Orders will be executed at the best available price when the market price (Last/ Index/Mark) reaches the designated trigger price.
Conditional Limit Order
Conditional Limit Orders will only be placed in the order book when the market price (Last/ Index/ Mark) reaches the designated trigger price. As a normal Limit Order will be placed once the order is triggered, traders can a Time in Force strategy.
The following order types are the most commonly used Conditional Orders and will be dealt in the Advanced Orders section
- Stop Loss Order (Position Close)
- Take Profit Order (Position Close)
Order Cost
Order Cost is the total margin needed to open a particular position. This includes the Initial Margin, taker fee to open and taker fee to close. The actual fee charged depends on the order type. Traders can find the order details in <Order Confirmation Window> and <Order Zone>.
Various Equations related to Order Cost
$$ \textsf{Order Cost} = \textsf{Initial Margin + 2-way taker fee(Fee to Open + Fee to Close)} $$
\begin{align}&\scriptsize\textsf{Taker fee to open}={{{\textsf{Quantity}\times\textsf{Multiplier}}\over\textsf{Avg. Entry Price*}}\times\textsf{Taker Fee Rate}}\\\tiny\\&\scriptsize\textsf{**Taker fee to close}={{{\textsf{Quantity}\times\textsf{Multiplier}}\over\textsf{Bankruptcy Price based on Order Price***}}\times\textsf{Taker Fee Rate}}\\\tiny\\&\scriptsize\textsf{***Long Position Bankruptcy Price}={{\textsf{Avg. Entry Price}\times\textsf{Leverage}}\over{\textsf{Leverage}+1}}\\\tiny\\&\scriptsize\textsf{***Short Position Bankruptcy Price}={{\textsf{Avg. Entry Price}\times\textsf{Leverage}}\over{\textsf{Leverage}-1}}\end{align}
<Order Cost Example>
David places a buy Limit Order of 10,000 BTC/USDT contracts at 8,200 USDT, using 10x leverage.
$$ {\small \textsf{Order Cost} = \textsf{0.12195121 + 0.00091463 + 0.00100610}=\textsf{0.12387194 BTC}} $$
\begin{align}&\scriptsize\textsf{Initial Margin}={\textsf{10,000}\over\textsf{8,200}}\times{\textsf{1}\over\textsf{10}}=\textsf{0.12195121 BTC}\\&\scriptsize\textsf{Taker fee to open}={{\textsf{10,000}\over\textsf{8,200}}\times\textsf{0.00075}}=\textsf{0.00091463 BTC}\\&\scriptsize\textsf{Bankruptcy Price}={{\textsf{8,200}\times\textsf{10}}\over{\textsf{10}+\textsf{1}}}=\textsf{7,454.5 USDT}\\&\scriptsize\textsf{Taker fee to close}={{\textsf{10,000}\over\textsf{7,454.5}}\times\textsf{0.00075}}=\textsf{0.00100610 BTC}\end{align}
Time in Force
Time in force is a special instruction used when placing a trade to indicate how long an order will remain active before it is executed. These options are especially important for active traders as they can diversify their trading strategies.
Time in Force Types
There are three types of Time in Force orders which are used together with Limit Orders.
GoodTillCancelled(GTC)
This order remains active indefinitely until either the order is filled or the trader cancels it. Through GTC orders traders who may not constantly watch stock prices can place buy or sell orders at specific prices and keep them for as long as desired. If the market price hits the price of the GTC order, the trade will execute. All orders on MCS are set to GTC by default.
<GTC Example>
David places a GTC order to buy at a price lower than the current trading level or sell at a price higher than the current trading level. If the current price is 8,500 USDT, David may place a GTC buy order at 8,450 USDT. If the market moves to that price level before David cancels the GTC order or it expires, the trade will execute.
ImmediateOrCancel(IOC)
This order must execute all or part immediately and cancels any unfilled portions of the order. Traders typically use IOC orders when submitting a large order to avoid having it filled at an array of prices. IOC can be selected when placing Limit Orders including conditional Limit Orders.
<IOC Example>
If David places a buy long limit IOC order of 10,000 BTC/USDT contracts at 9,500 USDT while the market depth only contains 7,000 BTC/USDT contracts at the ask price of 9,500 USDT, the order will only fill the quantity available (7,000) and cancel the remaining (3,000).
*Ask Price: When a sell order is submitted into the order book, it is placed with many different sell orders. The order with the lowest price is the current ask price.
FillOrKill(FOK)
This order must be filled immediately and completely or not at all. No partial fills are allowed. FOK orders are normally used when several unlinked markets are available for the same asset, in which case the trader will try to get the whole order filled in each market sequentially, without having to manually cancel each order if it is unfilled.
<FOK Example>
If David places a buy long limit FOK order of 10,000 BTC/USDT contracts at 9,500 USDT while the market depth only contains 7,000 BTC/USDT contracts at the bid price of 9,500 USDT, the order will not fill any contracts and the entire order will be canceled it cannot be filled completely.
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