Time in Force(GTC/IOC/FOK)
Time in force is a special set of instructions for traders to indicate how long an order will remain active before or after execution. These options are especially important for active traders as they allow traders to have more control over their investment strategies.
On BigONE, there are three types of Time in Force options for limit orders.
GoodTillCanceled (GTC) order remains effective indefinitely until fully executed unless the trader cancels. A GTC order is suitable for a trader who is willing to wait for the full quantity to be filled in its entirety and has the flexibility to cancel unfilled quantity at any time. This is the default option for all orders made on BigONE.
ImmediateOrCancel (IOC) order must be filled immediately at the limit price or better only. If the order cannot be filled immediately or fully, the unfilled portion will be canceled. An IOC order may be used when a large order is submitted to the market. To avoid having a large order filled at a wide variety of prices, an IOC automatically cancels any part of the order that does not fill immediately.
For example, Trader A intends to enter a market with a Buy Long limit order at USD 7,000 at 10,000 contracts with an IOC time in force strategy. The market depth contains only 8,000 contracts at a selling price of USD 7,000. As such, this order will proceed to execute and fill the available quantity of 8,000 at USD 7,000, and the remaining 2,000 contracts will be canceled.
FillOrKill (FOK) order is an order that must be immediately filled entirety at the limit price or better. Otherwise, it will be totally canceled. No partial fills are allowed. FOK orders are normally used by day traders who are hoping to scalp or take advantage of the opportunity in the market within a short duration.
For example, Trader A intends to enter a market with a Buy Long limit order at USD 7,000 at 10,000 contracts with a FOK time in force strategy. Upon submission, the market depth contains only 8,000 contracts at a selling price of USD 7,000. As such, the order will not be executed and canceled as the available quantity of 8,000 at USD 7,000 is unable to fill up the limit order fully.
Post Only Orders
Available as an additional option to Limit or Conditional Limit Orders, Post-Only Orders serve to strictly ensure that your Limit Orders will be placed into the order book and therefore receive a maker rebate then it is ultimately executed. By selecting this option, the system will automatically cancel the Limit Order, if it detects that it will be executed immediately upon the order placement.
Main purpose for trading
By selecting the Post-Only option with your Limit Orders, traders can ensure that their Limit Orders will enter the order book and therefore receive a maker rebate when the order is executed. What this means for traders is that they can now have more control over their trading fees, which is particularly sensitive for large volume or scalp traders.
In a highly volatile market situation (e.g., dumping), trader A places a buy long 100,000 BTCUSD contracts at USD 7,000. The current best ask price shown in the order book is 7,001 but quickly moved to 6,995 when the Limit Order is finally placed. The following are two examples of Trader A placing the Limit order with or without selecting the Post-Only option.
Without Post-Only option
As the best ask price has already moved to a better price point (USD 6,995) compared to the buy order's limit price (USD 7,000), the system will immediately execute the Limit Order as a Market Order and fill it from the best available ask price all the way to USD 7,000. As a result, this may unintentionally cause trader A to pay a taker fee when Trader A was actually expecting to receive a maker rebate. Note: The execution of your Limit Order will also be hugely dependent on your Time-In-Force strategy chosen for your limit order.
With Post-Only option
As the best ask price has already moved to a better price point (USD 6,995) compared to the buy order's limit price (USD 7,000), resulting in immediate order execution, the system will automatically cancel this limit order as it was unable to be placed into the order book. This means that Trader A does not have to pay any unintended taker fees.
Reduce Only Orders
Available as an additional option to limit orders, reduce-only orders serve to strictly reduce your position size by dynamically reducing or adjusting your limit order's contract quantity to match the contract size of the open position. This ensures that your position will not be unintentionally increased.
Main purpose for trading
By selecting the Reduce-only option with your limit orders, traders can ensure a limit order set to take profit will not be unintentionally executed as a new position with the opposite direction in the case that the current position has been already closed/stopped out/liquidated.
Trader A currently holds Long 1,000 BTCUSD contracts at USD 7,000 and also sets a stop-loss order at USD 6,800. Also, Trader A also wants to set a take-profit/partial take profit order with a limit price set at USD 7,200. The following are two examples of Trader A setting a Take Profit with and without selecting the Reduce-only order option:
Without Reduce-only Option
If the Last Traded Price triggers the order's stop-loss first and then proceeded to rise back to USD 7,200, the previous take profit limit order will likely be fulfilled, causing the trader to open an unintended Sell position at USD 7,200.
With Reduce-only Option
If the Last Traded Price triggers the order's stop-loss first, the corresponding take profit limit order at USD 7,200 will automatically be canceled, thereby ensuring its non-execution to prevent future unintended opening of positions.
Please take note:
1) In the absence of an open position, regardless of whether there are any other active orders, the system will automatically reject the placing of any reduce-only orders.
2) The "close by limit/market price" function available inside the Position tab has the Reduce-only function embedded by default with the priority of execution. In the event of insufficient margin, active orders with the worst limit price placed in the same direction as the close-by function will be canceled first.
3) In the case of holding an existing position, and assuming no other active orders, a reduce-only order can only be placed less than or equal to the existing open position's contract size. All other reduce-only orders exceeding the existing position's contract size will otherwise be automatically reduced or canceled.
4) In the case of holding an existing position and other active orders:
Without any existing Reduce-only order
The contract size of a new reduced-only order plus all active orders placed at a price better than this order cannot have a total contract size larger than the current open position. Otherwise, the contract size of the new order will be automatically reduced or canceled by the system.
With any existing Reduce-only order
The contract size of a new reduced-only order plus all active orders placed at a price better than this order cannot have a total contract size that larger than the current open position. Otherwise, the reduce-only order with the worst order price will be automatically reduced or canceled by the system.