Different Order Types in Spot Trading

Hata offers different order types for you to use in Spot Trading. You can use them to set your trading strategies and trade efficiently. Let’s look at the common order types in Hata Spot Trading.

What is a market order?

A market order allows you to immediately execute a purchase or sale of an asset at the most favorable current market price available.

You may enter an amount to buy or sell market order. For example, you can buy BTC by entering the Total amount of USD you wish to buy. On the other hand, if you wish to sell your BTC, you can enter the amount of BTC you wish to sell.

What is a limit order?

A limit order is a type of order you can place on the order book, specifying a particular limit price. Unlike a market order, it doesn't execute instantly. Instead, it will only be executed when the market price reaches your specified limit price or exceeds it. This means you have the option to purchase at a lower price or sell at a higher price compared to the current market price.

For instance, suppose you set a buy limit order for 1 BTC at $60,000, while the current BTC price is $50,000. In this case, your limit order will be immediately filled at $50,000, as it is a more favorable price than your specified limit ($60,000).

Likewise, if you place a sell limit order for 1 BTC at $40,000, and the current BTC price is $50,000, your order will be immediately filled at $50,000, as it is a more advantageous price than your limit of $40,000.

What is a stop-limit order?

A stop-limit order consists of two specified prices: a stop price and a limit price. With this order, you can establish the minimum profit you are content with, or the maximum amount you are willing to spend or lose on a trade. When the trigger price (stop price) is reached, a limit order is automatically placed.

Stop-limit orders are valuable tools for minimizing potential losses in a trade. For instance, let's say BTC is currently trading at $40,000, and you set a stop-limit order with a stop price of $39,500 and a limit price of $39,000. In this scenario, when the price drops from $40,000 to $39,500, a limit order will be initiated at $39,000.

What is an OCO (One Cancels the Other) order?

An One Cancels the Other (OCO) order merges a limit order and a stop-limit order. Both orders are placed simultaneously, but when one order is triggered and executed, the other order is immediately canceled. This ensures that only one of the specified orders can be executed, depending on the market conditions.

For instance, if BTC is currently valued at $40,000, you can utilize an OCO order to either buy 1 BTC when the price reaches $39,000 or sell it when the price climbs to $41,000. As soon as either of the orders is triggered and executed, the other one will be automatically canceled, ensuring only one of the transactions takes place.

What is a trailing stop order?

A trailing stop order allows you to set an order at a predetermined percentage distance from the current market price. This type of order proves particularly beneficial in volatile markets as it aids in mitigating potential losses and safeguarding profits when a trade doesn't progress favorably.

It's essential to understand that the trailing stop order does not retreat in the opposite direction. If the price moves unfavorably by the specified percentage, the order will execute and exit the trade at the prevailing market price.