There are various methods to place buy and sell orders for cryptocurrencies, just like in conventional stock market exchanges. It's crucial to comprehend how each one functions, though. A variety of trade kinds are available to traders, allowing them to profit from market volatility or hedge against it. When venturing into cryptocurrency exchange development, it is necessary for a Cryptocurrency exchange development company to provide maximum order options to enhance user experience. This article will explain the main crypto order types: basic, advanced, and conditional.
Order Book
The word order is used in financial markets by the investor to buy or sell investments, which may be in any form such as securities, bonds, cryptocurrencies, etc. In specific, crypto orders exist to exert some control over how crypto transactions are handled on a crypto exchange platform.
Here is a list of the different kinds of crypto orders that we must integrate when developing a crypto exchange platform.
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Basic Orders
The following categories of crypto orders are the most prevalent:
Market Order
The simplest type of order to carry out a cryptocurrency buy or sale is a market order. These orders only specify the number of cryptocurrencies that a user wants to buy or sell immediately. The price at which they get executed will be the best one at the time. You cannot execute market orders with any order condition.
Limit Order
The order book purchases the cryptocurrency at the specified limit price or a lower price when a user places a limit order to buy. When a user executes a limit order to sell, the cryptocurrency is sold at the limit price or a higher price.
Limit orders come in use to buy or sell cryptocurrencies when the market price reaches a specified value. Limit orders become executable only when the market hits the specified limit.
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Advanced Order Types a Crypto Exchange Should Have
Conditional Orders
For a number of reasons, the characteristics listed below link different orders together. Although they are made up of order types from the Basic and Advanced parts above, conditional orders are also regarded as order types.
One Cancels the Other | OCO
Orders that are OCO (one cancels the other) arrive in pairs, and when one is executed, the other is also immediately canceled.
An example of an OCO
If a trader has an open long account, they may set up their stop loss and take profit orders as an OCO order. This would enable them to simultaneously have two exit orders open without running the chance of the second order executing after the first order closes the position. For instance, the stop loss would be immediately canceled if the take profit was triggered.
One Sends the Other | OSO
OSO (One Sends the Other) orders, also referred to as conditional closes, activate a secondary order only in the event that the main order executes.
OSO Example
A limit order can be put in to start a position by a trader who is new to the market. When their limit order is executed, they can use an OSO/conditional close order to immediately open a stop loss. If they filed both orders normally, the stop loss might fill before the limit order, leaving them in a losing trade.
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Fill options
These are add-ons to an order that place restrictions on how the transaction can be filled.
Fill or kill / All or none
If a Fill or Kill order cannot be fully performed, it is either immediately canceled or partially executed.
Post limit / Post only
The purchase is prevented from posting to the wrong side of the order book by doing this. This choice is used by traders to guarantee that at least a portion of their limit order is filled as a "maker" order.
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What's Next
When developing a crypto exchange, we must ensure an efficient user experience. That requires a thorough understanding of crypto order types. Knowing your available trading instruments is essential, whether a user wishes to employ stop orders to lessen the likelihood of loss or OCO orders to plan for several outcomes simultaneously.
Hire blockchain developer, by doing so you can tap into his expertise in building secure and efficient blockchain solutions. They will be responsible for developing and implementing smart contracts, integrating our existing systems with blockchain platforms, and ensuring the security and scalability of our blockchain infrastructure.
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