7. Order Types
At present, Zeta offers six order types:
- 1.Market
- 2.Limit
- 3.Fill-or-Kill (FoK)
- 4.Immediate-or-Cancel (IOC)
- 5.Post-Only
- 6.Post-Only Slide
These orders are not restricted by price, time, or other factors.
Market orders are your go-to order type when you're after immediate, unrestricted trade execution. Market orders are filled immediately at the best available bid-price or ask-price on the orderbook.
Traders generally opt to enter and exit positions via market order when optimizing for timely trade execution over precision pricing.
When you place a market order, you're opting to buy or sell your derivatives contracts at the best available price the market has to offer. Market orders are clutch for traders that need to get in and out of positions quickly.
When time is of the essence, market orders are the fastest and most efficient tool for you to adjust your exposures, whether you're riding momentum or skirting a falling knife.
Before you place a market order, it is important to remember that the price you see in the trade modal is the mark-price (orderbook midpoint), and it is not necessarily representative of the price at which your trade will execute when placing a market order.
Conditional orders are triggered when pre-specified criteria are met.
Limit orders are used to specify the highest bid-price or lowest ask-price a trader is willing to accept. Traders use limit orders to define entry and exit prices to reduce their cost-bases and automate their entries and exits.
When you place a limit order, you are opting to open or close a position at a particular price or better. This means that once your order is placed, execution will not occur unless the market is able to accommodate your specified limit price.
Going long a perp on Zeta via limit order entails selecting a maximum price at which you are willing to buy (long) a perp. Your order will not be filled unless the price of the perp drops to your limit price.
Going short a perp on Zeta via limit order entails selecting a minimum price at which you are willing to sell (short) a perp. Your order will not be filled unless the price of the perp rises to your limit price.
Closing a long perp on Zeta via limit order is a take-profit order that entails placing a sell-to-close limit order at a specified price or higher in order to offset — and thereby close — your long perp position.
Clsoing a short perp on Zeta via limit order is a take-profit order that entails placing a buy-to-close limit order at a specified price or lower in order to offset — and thereby close — your short perp position.
Savvy traders will often enter a long or short position and then immediately place a buy (or sell)-to-close limit order at their desired profit-taking price.
This approach enables traders to realize positive PnL in the case of sudden and favorable price fluctuations.
Post-only orders enable market makers to be more surgical with their liquidity provision in order to save on trading fees.
They augment limit orders by ensuring they are posted to the orderbook strictly as limit orders (i.e., they are not executed immediately).
If a standalone limit order is placed and price jumps to the trigger threshold, the limit order will convert to a market order, potentially resulting in a suboptimal full.
Post-only limit orders remedy this by only permitting resting maker orders to hit the orderbook.
Post-only orders prevent limit orders from converting to market orders immediately upon hitting the orderbook.
If any part of the order would be instantly filled, the entire order is rejected. Makers use post-only orders to prevent paying taker fees.
Post-Only Order Example:
– Randy places a post-only limit order to long 1000 SOL perps at $20.50.
– The best bid and ask in the orderbook are $19 and $20 respectively.
– Randy's order would be rejected because it can't be displayed on the orderbook with a limit price.
Post-only slide orders are post-only orders with the additional stipulation that if the request would cross the orderbook, the order price will be adjusted to the best possible non-crossing price (i.e., one tick away from the best bid or ask price).
Post-Only Slide Example:
– Gabe places a post-only slide limit order to long 1000 SOL perps at $20.50.
– The best bid and ask in the orderbook are $19 and $20 respectively.
– Gabe's order would be accepted and displayed on the orderbook at $19.9999.
Durational orders are orders that deactivate after a specified period of time, hence time in force. Once the specified period of time elapses, the order will no longer be active.
Fill-or-Kill (FOK) orders must be filled in full at your limit price or better. If the order is not filled in full at your limit price or better, the order will be canceled. FOK orders prevent partial fills.
FOK orders are similar to All or None (AON) orders but include the added time component of an Imediate-or-Cancel (IOC) order. When placing a FOK order, you are saying, "fill the entirety of my order within my specified time frame or cancel it."
Traders use FOK orders to achieve swift trade execution at desirable prices in their desired size.
FOK Order Example:
– LeGarrette places a FOK bid to long 1,000 SOL perps at a limit price of $20
– The orderbook shows 980 SOL perp offers on the books for $19.95
– Even though there's an offer in the orderbook for below LeGarrette's limit price — his order is canceled because it cannot be filled in full
IOC orders must be filled immediately at your limit price or better. Any portion of an IOC order that is not filled immediately will be canceled.
IOC orders are not constrained by quantity — partial fills are allowed. IOC orders are useful to traders in need of prompt execution. The only two constraints for IOC limit orders are time and price.
When placing an IOC order, you are saying, "fill the maximum quantity of my order within my specified time frame and cancel all unfilled orders after that time frame has elapsed."
Traders often place IOC orders when they are trading in size and want to avoid having their orders filled at multiple price levels. IOC orders can also shield traders from subprime fills in volatile or low-liquidity markets.
IOC Order Example:
– Melvin places an IOC order to long 1,000 SOL perps at a limit price of $21
– The orderbook shows 690 SOL perp offers for $21 and 1500 offers for $21.50
– Melvin's order would be partially filled to the tune of 690 SOL perps at $21, and the remainder of his order (310 contracts) would be canceled.
Last modified 2mo ago