How does a limit order work?

 

A limit order is an order to buy or sell Bitcoins at a certain price or better. A bid (BUY) order will only be executed at the limit price or lower; an ask (SELL) order will only be executed at the limit price or higher.

A limit order is executed when it matches an opposite order from another trader. Thus, limit orders may only be partially filled and are not guaranteed to execute at all. While limit orders do not guarantee execution, they do ensure you won't pay more than the predetermined price.

Once a limit order has been filled or stopped, the order is removed from the order book and the trades are reflected in your account balance.

 

What are "limited“ orders ?

Limited orders are specified with the amount of Bitcoins that should be sold/bought and the price limit that you want to pay/earn at most at least per Bitcoin. The order will only be executed if a matching order within the specified price range is available. If no matching order exists, the order cannot be executed and waits for execution. "Limited orders” are great for:

  • Holding Bitcoins for a longer period of time and sell them at a higher exchange rate in the future. For example: You bought 1 Bitcoin for RM2000 and you want to sell it, when the exchange rate hits 2800 MYR/ BTC. You place the order: Limited Sell-order, Amount: 1 BTC, Limit: RM2800.
  • Trying to buy Bitcoins with a cheap exchange rate. For example, you plan to buy 10 Bitcoins when the exchange rate is at 1600 MYR/BTC. You place the Limited Buy-order: Amount: 10 BTC, Limit: RM1600.

 

Is it possible to get a bad price by placing a limited order?

The order matching is designed to match orders according to the current market price.

  • If you place a sell order and choose a limit of 1 MYR/BTC, your sell order will be matched with the current market price, but at least 1 MYR/BTC. If the highest bid is 2050 MYR/BTC and the highest ask is 2000 MYR/BTC, you will get 2050 MYR/BTC when selling your Bitcoins. If the highest current bid is at 1950 MYR/BTC and the lowest current ask is 2000 MYR/BTC, you will get RM 1950 for your sell order. Transaction fees are not considered in this example.

If you want to buy a Bitcoin and place your buy order with 4000 MYR/BTC as limit, the order will still be matched with the current market price, at a maximum of RM4000 per Bitcoin. If the currently highest bid is at 1950 MYR/BTC and the market price (ask) is at 2000 MYR/BTC, you will be able to buy Bitcoins for RM2000. If the current, lowest Ask is 2050 MYR/BTC and the market price is at 2000 MYR/BTC, you will be matched for 2050 MYR/BTC. Transaction fees are not considered in this example.

 

More Information about Orders....

 

Is it possible to place orders that are not covered by my account balance?

Yes! We have decided to enable the placing of orders that actually are not covered by available balance. Those orders will have the status “paused” and will be transformed to “open”, executable orders as soon as balance is available. This enables our users to place a chain of currently not executable orders that will be matched one after another when the first order could be successfully matched and gave the necessary balance.

What are "contradicting orders" ?

It is possible to place orders without having the needed balance to execute them. As a result, there exist combinations of orders that will result in a shrinking balance. For example:

  • You place a limited order, sell 100 BTC RM2600, but you currently have no Bitcoins. The order is placed and has the status "paused".
  • Afterwards, You place an unlimited order, buy 100 BTC.
  • As soon as the unlimited order get executed, you would instantly sell your Bitcoins for RM2600, which is RM200 per BTC lower than you have procured them. Each Bitcoin makes you lose RM200 (transaction fees also have to be applied).

It is not possible to place this constellation of orders, because those would result in a sure loss. You will get an error message which tells you, which order is contradicting with the order you were about to place.

 

Why don't I get credited the full value of my executed Order?

For every executed order you pay 1% transaction fees. This applies for buy and sell orders alike. If you sell 10 Bitcoin at 2600 MYR/BTC, the price is 26,000.00 Ringgit plus fees. Thus 1% virtual transaction fee is subtracted and you get credited RM25,740. Currently there is no way to lower your transaction fees.

How can I create a new order?

Either go to the "Trading" page you may place a new order directly. You can specify the type of the order, the amount of traded Bitcoins and limit the price. In general, you can place following orders:

  • Buy order (I want to buy Bitcoin) - limited and unlimited
  • Sell order (I want to sell Bitcoin) - limited and unlimited

 

How can I cancel orders?

Go to the "Trading“ page and check at your current orders. There is a clickable button marked with an X on the left side of every open or paused order. After clicking you can cancel the order by confirming the subsequent dialog.

Is it possible to cancel executed orders?

Xbit Asia exchange software which automatically matches and executes orders. Being able to cancel an executed order means to conflict with the safe execution of trades. We enable safe trades that cannot be reverted, giving our users full security. Giving the opportunity to cancel or revert executed trades endangers the safety of trades.

What are "best execution” orders?

Execute best orders (or "at best” orders) will be matched with the best available price on the market, therefore getting matched instantly (if possible). "At best” execution orders only specify the amount of Bitcoin which are supposed to be sold/bought and, in contrary to limited orders, cannot be specified with price limit. “Best execution” orders are best if:

  • You have no knowledge of the current market price structure.
  • You want to buy or sell a certain amount of Bitcoins as quickly as possible.

 

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