Lesson 3 of 6 · 5 min
Limit orders: you name the price
A limit order names a price: buy no higher than this, sell no lower than this. It is how you stop paying the spread, provided the market comes to you.
If your buy limit is below the lowest ask, nothing happens yet. The order rests in the book as a bid, in a queue behind others at that price. It fills only if sellers come down to you. Maybe in a minute, maybe never. A limit order guarantees the price, not the trade.
While it waits, the money is reserved. Place a buy worth 500 USDT and 500 USDT becomes unavailable, because the order could fill at any moment and the desk has to be able to honour it. Cancel the order and the money comes back.
An order that stays until it fills or you cancel it is called good-till-cancelled (GTC). Every limit order on this desk is GTC, so a forgotten one will still be there tomorrow.
Your turn
Place a limit below the market, then cancel it
- Open BTC, choose Buy and Limit.
- Set the price about 1% under the last price and a small amount, then press Buy BTC.
- Find the order in Open orders and check that your available USDT went down.
- Press Cancel and watch the balance come back.
What you just learned
A limit order guarantees the price, not the fill, and it reserves your funds until it fills or you cancel.