The world fourth largest bitcoin exchange OKCoin announced 5 new order types including Stop, Trail Order, Iceberg Order, TWAP, OCO, which won’t charge any additional trading fees.
A board order is an order with pre-conditions that must be met to place the order on the market. As soon as the conditions are made the order will immediately be entered into the market.
Example 1:The price of Bitcoin is currently below 2800 USD and a trader believes there is strong resistance at this price. If the price suddenly breaks 2800 USD the market may experience a large rise. In this scenario a board order would be of use:
When the last market price reaches 2,801 USD, the system will enter your order(Buy 10 BTC at 2,802 USD) into the market.
Example 2:The price of BTC just surpassed 2800 USD and a trader believes there is strong support at this level, if BTC falls below the vicinity of 2800 USD it may continue to fall rapidly, they could set a Board order:
When the last market price reaches 2,799 USD, the system will enter your order (Sell10 BTC at 2,798 USD) into the market.
A trail order is for when market prices are fluctuating wildly and traders want to enter a future order into the market. A trail order can be set by choosing (1) a defined price trigger level, and (2) a defined % change. A sell/buy order occurs only after two conditions have been met in the following order: (1) the defined trigger level has been breached, and (2) the defined % change has occurred in the trader’s specified direction.
Example 1:The current market price of BTC is 2800 USD, a certain decides that the price of BTC will continue to rise to at least 2850 USD or more, but afterwards might drop back down. The trader wishes that afterwards large volatility emerges and he sells the bitcoins he was holding. For these reasons one would establish a trail order:
The price rises to 2840 USD and falls again back down to 2810 USD, the callback rate is bigger than 1%, but because the highest price was less than the price trigger level of 2880 USD, the method was never triggered. When the price once-again rises to 2890 USD then falls to 2860.1 USD, the two conditions have been met. Firstly, the price trigger level of 2880 USD has been breached, and an exact callback rate of 1% has occurred. Therefore, the 10 BTC are sold at the market price. Below the price trigger level, the order is not activated. The order is executed after breaching the price trigger level and subsequently falling by the defined callback %.
Example 2:The current Bitcoin market price is 2800 USD. A trader decides that the price is close to reaching its lowest point, and at 2750 USD (or lower) the price is reasonable enough to buy. The trader hopes to buy-in quickly when the market (price) rebounds and would thus choose to place a Follow Order:
The price falls to 2760 USD and then rises back up to 2790 USD, the callback rate is bigger than 1%, but because the lowest price was greater than the price trigger level of 2750 USD, the method was never triggered. When the price once-again falls to 2700 USD then rises to 2727 USD, the two conditions have been met. Firstly, the price trigger level of 2750 USD has been breached, and an exact callback rate of 1% has occurred. Therefore, 1000 USD is used to purchase BTC at the current market price.
An iceberg trade is for when a trader wishes to enter the market with a large order. In order to avoid the creation of slippage from the current market price, a large order will automatically be broken into many smaller orders. Based on the current buy/sell price and the trader’s iceberg parameters, the smaller orders will automatically be placed into the market. When a smaller order is completely filled or the last price differs from the price at which the previous order was placed at, a new small order will atomically be placed.
Example 1: A trader wants to buy 100 BTC, but doesn’t want to impact the market price. He thus uses an Iceberg Trade:
At this time, the system will automatically start an iceberg order. Each smaller order’s value will be 90-110% of each other. The order’s price will be that of the last buy price * (1 – order variance). Once completely filled, a new order will be placed. When the last market price exceeds 2*(order variance), the previous order would be cancelled and a new one will be placed. When the amount traded equals the total order amount, the iceberg trade has been filled. When the last market price exceeds the highest buy price of 2810 USD, the iceberg order would be temporarily halted. After the price falls down to 2810 USD, the iceberg order would be recommenced.
A Time-Weighted Average Price order is used when a trader wants to break an order into multiple smaller orders to be traded in the market at pre-determined time intervals. A trader would use this strategy if they want to avoid affecting market perceptions and the market price.
Example 1:A trader wants to buy 10,000 USD of BTC using small orders which are weighted over pre-determined time intervals.
Example order book:
Based on the trader’s chosen price variance the buy price would be 2800 USD * (1+price variance(0.3%)) = 2808.4 USD. In this example, the amount for sale under the price of 2808.4 USD is 11 (2+3+4+2). Based on the trader’s sweep ratio %, the order amount will be equal to the total counterparty’s amount * Sweep ratio % = 11*50%=5.5 BTC. The system would therefore automatically place a buy order for 5.5 BTC under the price level of 2808.4 USD. If the commissioned order is not immediately filled, it is cancelled. Based on the trader’s chosen time interval, the system would place orders automatically until the total order amount has been filled. If the price exceeds the trader’s defined highest buy price, the system would place an order at the trader’s highest buy price. If there is no counterparty, then the TWAP would be automatically suspended until the price falls to a price in which it could be traded. When the amount traded equals the total order amount, the TWAP trade has been filled.
To set up an OCO order, you need to choose target profit trigger and order price, stop loss trigger and order price. When the last price reaches one of the trigger prices, the correspondent order will be entered into the market.
Example 1: A trader bought 10 BTC at 2,800 USD, and believes there is strong resistance at 3,000 USD. To target profit, these 10 BTC should be sold when the price hits 3,000 USD. Also, the trader believes there is strong support at 2,750 USD. To stop loss, these 10 BTC should be sold when the price falls below 2,750 USD. In this case, an OCO sell order could be placed.
When the last market price reaches 2,750 USD, this OCO order will be triggered, and the preset order (sell 10 BTC at 2,745 USD) will be automatically entered into the market.
Example 2: A trader borrowed 10 BTC on the P2P Lending platform, and acquired 30,000 USD by selling them at 3,000 USD. The trader believes there is strong support at 2,800 USD. To target profit, 30,000 worth of BTC should be bought when the prices falls to 2,800 USD. Also, there is strong resistance at 3,050 USD. To stop loss, 30,000 worth of BTC should be bought when the price breaches 3,050 USD. In this case, an OCO buy order could be placed.
When the last market price reaches 2,800 USD, this OCO order will be triggered, and the preset order (buy 30,000 USD worth of BTC) will be automatically entered into the market.