All you need to know about limit orders
HeyTrade users can enjoy a new feature: limit orders. Today, we will tell you what they are, how they work and their main benefits.
How do limit orders work?
To place a limit order it is sufficient to set a specific price and expiration date at the moment of issuing it. The sale or purchase of the asset will only be executed if the price you choose is reached (or improved).
Buy limit order
Let’s say you want to buy an asset but its price is higher than what you wish to pay. With a buy-limit order, you will only have to set a price equal to or lower than the current price.
If the asset reaches (or improves) the target price within the validity period you have determined, the order will be triggered.
Sell limit order
Once you have understood how the buy order limit work, understanding how a sales one works is very simple.
In this situation, suppose you want to sell an asset from your portfolio, but its current price is below the price at which you wish to sell. With a sell limit order, you will have to set a price equal to or higher than the current price.
If the asset reaches (or improves) the target price within the validity period you have fixed, the order will be triggered.
There are two details to be considered when you place a limit order:
- If the asset that you want to buy or sell will not reach the target price before the expiration date, the pending order will not be filled.
- If there are not enough assets trading at the target price, or there is insufficient demand, the order may not be filled or may be partially filled.
Choosing the type of order depends on your needs.
When you use a limit order you are assured of the execution price, however, you are not guaranteed that it will be filled. These orders can take from minutes to days to be placed.
If you want to be sure that the purchase or sale is completed at the price you determine, it is best to issue a limit order.
On the other hand, when you place a market order, the transaction will be executed at the current price available. At HeyTrade, market orders are sent to the trading venue with the best price, following the best execution policy.
So issuing a market order will be a good idea if you want to trade at the moment. Keep in mind that from the moment you check the asset price, click “buy/sell” and the order is executed, price variations are possible.
If you have any questions, please send us an email at firstname.lastname@example.org. We will be happy to help you.