Limit Top Order: Get to the Front of the Line

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Cove Markets has created a new order type / algorithm for users who want:

  1. To avoid paying higher take fees
  2. To trade at the best market price
  3. Quick order entry

Problems with Market and Limit Orders

Most users who want to trade at the market price use market orders. These don't require a price input and result in immediate execution. However, many exchanges have higher taker fees than maker fees. For example, on Kraken this difference is 0.10% or $13 at current price levels. Learn more about exchange fees.

A trader can avoid paying high take fees by placing a limit order below the best offer on that exchange. However, prices move quickly and it can be difficult to type in a 7 digit price before the market moves.

Limit Top Order

The Limit Top order type, developed by Cove Markets, will send a limit order at a price equal to the best price in the order book at that time. Unlike standard limit orders, no price input is required from the user. For example, if you are a buyer, it will enter a limit order at the best bid in the order book and place it in the order book. The order will remain there in-line with your Time-In-Force (TIF) selection or until executed.

Risks Involved

1. There is a risk your order could execute as a Taker. In the brief time it takes our system to consume market data, generate your order and send it to the exchange, the exchange order book may have changed.

2. The best way to get immediate execution is with a Market order. However, you can often avoid a higher fee and get a better trade price by using a Limit order. But execution is not guaranteed and the market could move against you before it executes.

Other Order Types

Read more about other order types offered on CoveTrader.

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