Market Order vs Limit Order in Crypto Explained

How market and limit orders work

If you're choosing between a market order and a limit order, you need to decide if timing or price is your main focus. Market orders are for immediate action, they buy or sell at the best rates available right now. Limit orders let you name your price, and they'll only execute if the market hits that figure (or better). If the market doesn't get there, your order just sits unfilled.

Every order goes into the order book, which lists all the current offers to buy and sell on an exchange. For more on this process, see what an order book is and how to read it.

Choosing: is certainty of price or execution more important to you?

Market orders emphasize quick execution. Your trade will happen fast, but don't count on the displayed price staying steady, especially if you're trading a sizable amount or the market is moving quickly. Limit orders are all about controlling the price you pay or receive; the exact amount is defined. But that surety means your order might not go through if the market never matches your price.

Here's an example: if the order book lists 0.5 units for sale at 100 EUR and another 1 unit at 101 EUR, buying 1 unit with a market order would get you 0.5 at 100 EUR, then 0.5 at 101 EUR, so your average is 100.50 EUR a unit. Fees may also differ with each approach. See maker vs taker fees for specifics on how exchanges apply them.

Choosing the order type to suit your crypto strategy

Neither order is always best. If you're focused on price and not worried about how long it takes to fill, traders often go for limit orders. If you're more concerned about entering or exiting the market immediately, a market order fits better. There's also the stop order, which activates only when your chosen price is reached, learn more at how stop-loss orders work.

Crypto prices can swing quite a lot. Any order, including limit, involves risk of loss. It's wise to check on open limit orders regularly; they remain active until they're executed, you cancel, or they expire.

Frequently asked questions

Is a market order or a limit order cheaper?

The cheaper option varies based on the exchange's fee structure. Some platforms will charge different fees for orders that add to the order book versus those that remove liquidity, and a market order might end up costing more due to price movement between placing and filling the order. Take a close look at both the exchange fee schedule and the likely trade price before deciding.

Why did my limit order not fill?

This means your chosen price was not reached in the market, or your order is waiting behind others at the same price level in the book. Depending on how you set it up, including time-in-force, the order could stay open for quite a while, or eventually expire. Check your active orders and the order book, and consider canceling or changing your price if your priorities have changed.