What is limit order?

An instruction to buy or sell at a specified price or better.

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An instruction to buy or sell at a specified price or better.

Limit orders avoid paying the spread but may not execute if the price never reaches your limit. Contrast with market order.

This is the order type that makes a purchase cheaper on almost every exchange, and it is one tab away from the simple buy screen most people use. The tradeoff is genuine: you control the price and give up the certainty of a fill.

How it works

You specify a side, a quantity, and a limit price. A buy limit executes at your price or lower; a sell limit at your price or higher. The exchange will never fill it worse than the number you set, which is the whole guarantee.

What happens next depends on where your price sits relative to the market. A buy limit above the current best offer crosses the spread and fills immediately against resting orders, charging the taker fee. A buy limit at or below the best bid rests on the book and waits, and when it eventually fills it charges the maker fee, which is lower on nearly every venue and sometimes a rebate.

A resting order is subject to price-time priority. It sits behind everything already resting at that price level, and it fills only once those ahead of it do. Partial fills are normal: if only some of the size at your price is available, you receive part of the order and the remainder continues to rest.

Two settings ride along. Time-in-force decides how long it waits, with good til canceled the usual default. And a post-only flag rejects the order rather than letting it cross, which guarantees maker treatment for anyone trading specifically for the fee difference.

Example

Illustrative arithmetic on a $500 purchase. The book shows a best bid of $99.95 and a best offer of $100.05, a 10 cent spread. A market order lifts the offer at $100.05, buying 4.9975 units, and pays an illustrative 0.40 percent taker fee of $2.00. Total outlay is $502.00.

A limit buy at $99.95 rests on the bid. When a seller crosses to you it fills at $99.95, buying 5.0025 units, and pays an illustrative 0.20 percent maker fee of $1.00. Total outlay is $501.00 for slightly more of the asset. The saving is a dollar on this trade, it repeats on every trade, and it costs you the possibility that the price walks away and the order never fills.

Why it matters when you buy

Choosing the order book over a simple buy flow is usually the single largest saving available to a retail buyer, and choosing a resting limit over a market order is the next one. The fee comparison shows maker and taker fees per venue, the liquidity view shows the actual spread and depth we measure on each exchange, and limit versus market orders walks through the choice.

Questions

Why did my limit order not fill?

The market never traded at your price, or it did and the orders ahead of you in the queue absorbed all the available size. Both are ordinary.

Can a limit order fill at a better price?

Yes. A buy limit fills at your price or lower, so if the market gaps down through your level you can be filled below it.

Should I always use a limit order?

It saves money when you can wait and costs you the trade when you cannot. For a purchase you want completed now regardless of a few basis points, a market order does that job.

Guides that use this term

  • Dollar-Cost Averaging Into Crypto: How It Works and How to Set It Up

    Dollar-cost averaging means buying a fixed amount of an asset on a fixed schedule instead of all at once, and on a crypto exchange you run it either as a recurring buy the platform executes for you or as an order you place yourself each period, which is mostly a decision about fees.

  • How Crypto Exchanges Make Money

    A crypto exchange earns most of its money from trading fees charged on both sides of every trade, and adds revenue from the spread built into simple buy buttons, deposit and withdrawal charges, listing arrangements, interest on customer balances, and paid products such as staking and derivatives.

  • How to Read an Order Book

    An order book is a live list of every unfilled buy and sell order for one trading pair, sorted by price, with buyers stacked below the current price and sellers stacked above it, and reading it tells you what your order will actually cost before you place it.

  • Limit vs Market Orders: When to Use Each

    A market order buys immediately at whatever price the order book offers, and a limit order buys only at a price you name or better, so the choice is between certainty of execution and certainty of price, and on most exchanges it is also a choice between two different fee rates.

  • Recurring Buys on Exchanges: How They Work and What They Cost

    A recurring buy is a standing instruction that tells an exchange to purchase a fixed amount of an asset on a schedule, funded either from your cash balance or by pulling from a linked bank account, and it is usually priced as a separate product at a higher rate than the same order placed by hand.