Must-Have Order Types in a Crypto Exchange

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.

The various crypto orders that we need to incorporate when building a crypto exchange platform are listed below.

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Basic Orders

The following are the most typical kinds of crypto orders:

Market Order

The simplest type of order to carry out a cryptocurrency buy or sale is a market order. Only the quantity of bitcoins that a user wishes to buy or sell right away is specified in these orders. 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

When a user executes a limit order to buy, the order book buys the cryptocurrency at the set limit price or a lower price. 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 only become operative when the market reaches the designated limit.

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Advanced Order Types a Crypto Exchange Should Have

Conditional Orders

The criteria listed below link various orders together for a variety of purposes. 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

A trader may set up their stop loss and take profit orders as an OCO order if they have an open long account. 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, if the take profit was triggered, the stop loss would be instantly cancelled.

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

A Fill or Kill order that cannot be fully carried out is immediately cancelled or only partially carried out.

Post limit / Post only

By doing this, the purchase is kept from posting to the incorrect side of the order book. 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 the trading tools at your disposal is crucial, whether a user wants to use stop orders to reduce the possibility of loss or OCO orders to prepare for multiple outcomes at once.

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