What is a Stop Loss Limit order?
A stop loss limit order is a combination of a regular stop loss and a limit order, the only difference being that when the price reaches the stop price for the order, the order becomes a limit order instead of a market order. A stop-limit order does not get filled if the asset’s price never reaches the order’s target.
When the price reaches the stop price for a Stop Loss Limit order, it becomes a limit order and buys or sells at the limit price or better.
That’s a key distinction there with potentially big implications, A Stop Loss order createS a market order while A Stop Loss Limit orders creates a limit order.
A regular stop loss order virtually guarantees an order being filled around the stop price but there could be some slippage, meaning some or all of the order may take an unexpected price.
On the other hand, a Stop Loss Limit order will attempt to get the limit price or better but may actually go unfulfilled, especially if the market is moving fast or if there is insufficient buyers or sellers at the limit price or better.
When is a Stop Loss Limit order typically used?
Post only orders are commonly used by market makers which are typically large trading firms with specialized trading strategies that take advantage of getting the ‘maker’ rebate instead of paying the ‘taker’ fee. Taker fees are usually paid when using regular limit orders or when taking liquidity from the market, but anyone can take advantage of using post only orders.
On Beaxy, each maker receives a rebate of 0.02% on their order instead of the taker fee which starts at 0.2% however fees can be greatly reduced by paying fees with the native BXY token and coin staking. So if you make large orders or trade in high volume, post only orders may help with cost saving especially in conjunction with BXY.