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Limit order is a type of order that allows traders to set a price called the "Order price". As compared to market orders, limit orders provide an option for traders to have better control over their position's entry or exit price at the expense of giving up order execution guarantees.
The main reason why traders limit orders are executed immediately is due to the following:
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Buy Long Order = Order Price HIGHER than Best ASK Price (Prices that traders are willing to sell)
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Sell Short Order = Order Price LOWER than Best BID Price (Prices that traders are willing to buy)
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Did not select the POST-ONLY function.
A) Using the limit Buy order at USD 10,207 as an example, the system will do the following
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Best ASK Price inside the order book is USD 10,183.
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Using the logic of Buy Low & Sell High, the system compares the Order Price vs best ASK Price (USD 10,207 vs USD 10,183) and determines that the order can be filled at a lower buying price of USD 10,183 at that specific moment
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The order will be filled until the contract quantity is met or until USD 10,207, whichever comes first.
B) Using the limit Sell order at USD 10,100 as an example, the system will do the following
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Best BID Price inside the order book is USD 10,182.50.
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Using the logic of Buy Low & Sell High, the system compares the Order Price vs best BID Price (USD 10,100 vs USD 10,182.50) and determines that the order can be filled at a higher selling price of USD 10,182.50 at that specific moment
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The order will be filled until the contract quantity is met or until USD 10,100, whichever comes first.
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