Welcome to MCS, the world-class derivatives trading platform where traders ALWAYS come first.
The topic of this post is "MCS Basic Order Type".
The basic order types of MCS are as follows:
Market Order, Limit Order, and Conditional Order
What is a Market Order
A market order is an order to buy or sell at the best available price in the market and is filled as soon as the order is placed. When traders place a market order, the orders being filled is guaranteed, however, traders should be careful of price fluctuations. In the case of market orders, the taker fee is applied.
What is a Limit Order
A limit order is a way of trading at the price specified by traders.
When traders want to go long, traders can specify the lowest price that they would like to buy and when wanting to go short, traders can specify the highest price that they would like to sell.
The order is filled only when the market price reaches the limit price that the trader specifies. If there is no order that matches the limit price, it may take a longer time to fill the order.
Because of this, long and short limit orders are mostly used by setting the price respectively lower or higher than the last traded price. If each order is traded at a higher or lower price, they will be filled up to the specified price as a market order and the remaining contract quantity stays in the order book as a limit order.
When the limit order is submitted, the trader can cancel the order or else the order will stay in the order book until it is filled. The way of matching orders may, however, vary depending on the time in force used. Therefore, you can use limit orders to partially conclude as market orders and remain the rest of the outstanding orders as limit orders.
What is a Conditional Order
A conditional order is executed only when the preset condition is met. Traders must set the trigger price based on the last traded price, mark price or index price. This can be used when a trader wants to use an advanced strategy that can automate trades depending on the price fluctuations. A conditional order includes the following orders.
Conditional Market Order
A conditional market order is filled at the best price when the market price (last traded price/index price/mark price) reaches the specified trigger price.
Conditional Limit Order
A conditional order is placed in the order book only when the market price (last traded price/index price/mark price) reaches the specified trigger price. If the condition is met, a limit order is submitted, therefore the trader can use the time in force strategy.
For now, we have covered the basic order types of MCS. In the next article, we will provide information regarding the advanced orders.
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