Crypto glossary
Limit order
A limit order is an instruction to buy or sell an asset only at a chosen price or better, so it may wait in the order book until the market gets there.
A limit order sets the worst price a trader will accept: a buy limit will not pay more than the stated price, and a sell limit will not accept less. If the market has not reached that level, the order rests in the order book until it is filled, cancelled or expires.
Resting limit orders add liquidity, so many exchanges charge them a lower maker fee than orders that execute immediately. Traders use them to buy dips at set levels, to build positions in steps or to sell part of a holding at price targets. Some DEXs and aggregators also offer on-chain limit orders, executed when a keeper or solver finds the price.
The trade-off is certainty of price against certainty of execution. In a fast market the price can jump past the limit and leave the order unfilled, and a partly filled order leaves the rest open. Settings such as post-only or fill-or-kill change how the order behaves.
Example
With ETH at 3,200 dollars, a trader places a buy limit order for 1 ETH at 3,000; it fills only if sellers accept 3,000 or less, and otherwise stays open in the book.
Related terms
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