Glossary
Limit order vs market order
A market order fills now at whatever price the book offers; a limit order fills only at your price or better, or not at all.
A market order says "buy this much, now". It fills immediately against the resting orders on the book, at the best available prices, and you find out the average price afterwards. A limit order says "buy this much, but not above this price". It sits on the book until the market reaches your price, and it may never fill. The first is certain to execute and uncertain in price; the second is certain in price and uncertain to execute.
The choice decides which fee you pay and how much slippage you take. A market order is always a taker order — 0.10% at most offshore venues, 0.80% on Kraken Pro Tier 1, 1.20% on Coinbase Advanced — and it can slip on a thin book. A limit order that rests is a maker order, charged the lower rate, with no slippage at all. For anything beyond a small purchase in a major pair, a limit order placed a fraction below the current price is usually the cheaper trade.
The exception that catches beginners: a limit order priced above the current ask (to buy) or below the current bid (to sell) fills immediately, as a taker, because it crosses the spread. The limit protects you from a worse price; it does not force a maker fee.
Where this shows up
- Coinbase data sheet
- Kraken data sheet
- Binance data sheet
- Fee comparison and calculator
- Best exchanges for beginners
Frequently asked questions
Which order type should a beginner use?
A limit order at or slightly below the current price, on the exchange's pro or advanced view. It costs less than a market order and far less than an instant-buy widget, and it does the same thing for a small purchase in a major pair.
What happens if my limit order never fills?
Nothing. It stays on the book until you cancel it or the exchange's expiry applies. No fee is charged for an order that does not execute.
Related terms and pages
Related terms
- Maker and taker fees
The two trading fees an exchange charges: a lower maker fee for orders that add liquidity to the book, a higher taker fee for orders that remove it.
- Spread
The gap between the best price a buyer will pay and the best price a seller will accept. You cross it on every trade, and it is a cost even when the fee is zero.
- Slippage
The difference between the price you expected and the price your order actually filled at, caused by the order eating through the book.
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