What is an order?
The order is a buy or sell bid given by the user at a specific price of a binding nature to buy or sell a particular crypto asset.
What is The Order Book?
Buy or sell orders given by users are recorded in the order book. Bitmatrix holds an order book for each crypto asset. Buy and sell orders recorded in the order book are converted into definite buys/sells by way of matching. The most recent price realized by matched buy and sell orders in the order book is the market price.
Orders can be canceled by the user before they are processed.
Price and time priority is the basis for the processing of orders in the order book.
What is The Price Priority in Orders?
In terms of price, lower sell orders and higher buy orders take precedence over others. For example, say sell orders entered into the order book for an asset are 100TL, 101TL and 102TL. A 100TL sell order will be executed before others. For the same example, when we assume that it was a buy order, then the buy order of 102TL will take precedence.
Market orders have price priority against limit orders.
What is The Time Priority in Orders?
The order entered first at the same price takes precedence over the others. For example, a user (A) has entered a buy order of 100TL at 10:00 for an asset. When another user (B) enters a buy order of 100 TL at 10:01, the user (A) will have the priority over (B) so its transaction will hold the right to be realized first.
How long will the orders be valid?
Orders entered in the order book are valid for 28 days unless canceled by the user. Orders not matched during this period are automatically canceled by the System.
What are the types of orders?
Users can enter four types of orders.
- Market Order
- Limit Order
- Stop Limit Order
- Spread Order
What is a Market Order?
These are orders entered only in amount, without specifying the price. They are processed by matching the best current price on the other side until the order amount is met. Market buy orders are matched with the current lowest sell price and market sell orders with the current highest buy price.
What is a Limit Order?
These are the orders for which the user specifies both the amount and price of the crypto asset to be bought or sold. Unless the unrealized part of the order is processed, it remains in the order book until the end of the 28-day validity period.
Limit orders allow you to trade at a better price than market orders. However, limit orders are not guaranteed to be realized. Your limit orders cannot materialize if the current price does not decrease (or not increase) to the price level of your buy(sell) orders.
Example: You would like to buy an asset for 95TL while its current price is 100 TL. If the price drops to or below 95 TL, the limit order you entered will be automatically materialized at 95 TL or at a better price. As long as the current price does not fall to 95 TL, your buy order does not materialize.
What is a Stop Limit Order?
It is the order type whose conversion into a transaction is bound to conditionality. The Stop Limit order has two components: the price determined with conditionality (stop price) and the price with which the transaction is desired to materialize (limit price).The reaching of the market price of a crypto asset to the level determined with conditionality, triggers the processing of the “stop-limit" order as "limit” order in the order book.
Example: Say an asset you bought for 100 TL is currently priced at 130 TL on the market. Although you are currently at a profit, you think that the price might continue to increase. On the other hand, you are afraid of losing your current profit in a reverse motion. In such a scenario, you can protect yourself by entering a stop limit order (to take advantage if the price goes up, to realize your gain when it starts to go down). Let us suppose you entered a stop limit order with a stop price of 120 TL and the limit price of 115 TL. If the current price drops to 120 TL or below, that will trigger that your selling limit order of 115 TL will be registered in the order book. In case the price continues to decrease, you will have sold your asset for 115TL, with a gain of 15TL, having saved some of your existing gains.
What is a Spread Order?
A Spread order allows users to place multiple limit orders in their specified price range. Instead of manually entering different orders based on a specific strategy, it is possible for users to enter multiple orders in a given distribution (equal, linear or fibonacci distribution) within an order.
For example, when the price rises, you may want to sell part of your crypto assets. You can prevent the loss of time by entering multiple limit orders separately, by entering a spread order. Depending on your trading strategy together with how much crypto assets you want to sell at which price, you can enter multiple orders at once by setting the distribution yourself by spread orders.