What is Post-Only Order?

A post-only order is a type of trading order used in cryptocurrency markets. It ensures that your Limit Orders are added only to the order book. This allows you to qualify for lower trading fees compared to executed orders. When you choose the post-only option, the system cancels the limit order if it would be executed immediately upon placement. This helps traders control their trading fees. It is particularly useful for those engaging in large-volume or scalping strategies.

How It Works

A post-only order adds liquidity to the order book instead of taking liquidity. Your order stays as a limit order on the order book. It will not be matched and filled immediately. If conditions for immediate execution are met, like crossing the spread, the system cancels the order. This prevents it from executing as a market taker. As a result, you benefit from lower maker fees instead of higher taker fees.

Practical Applications

Post-Only Orders help traders minimize trading fees by ensuring their orders add liquidity to the market. They are especially beneficial for large volume traders or those using scalping strategies. Even small fee differences can significantly affect profitability. By using Post-Only Orders, traders can place their orders to stay on the order book. This reduces costs and increases overall trading efficiency.

Benefits

Using Post-Only Orders provides several benefits:

• Lower trading fees: Ensuring orders add liquidity qualifies traders for maker fees, which are typically lower than taker fees.
• Control over execution: Prevents accidental immediate execution, allowing traders to manage order placements strategically.
• Improved strategy implementation: Supports advanced trading strategies by offering more predictable order behavior in volatile markets.

Things to Remember

• Purpose of Post-Only Orders: They are designed to add liquidity to the order book. This ensures traders qualify for lower maker fees instead of higher taker fees. This is important for minimizing trading costs, especially in high-volume or frequent trading.
• Automatic Cancellation: If a Post-Only Order would execute immediately upon placement, the system cancels it. This prevents the order from becoming a market taker. Traders can maintain control over their fee structures.
• Strategic advantage: Using Post-Only Orders improves trading strategies by ensuring predictable order behavior. Traders can implement strategies like scalping or large-volume trading with lower costs and greater efficiency.