A limit order is an instruction to buy or sell an asset at a specific price, or better. Unlike a market order, which executes immediately at whatever price is currently available, a limit order will only fill at your chosen price (the "limit price") or a more favorable one. It won't fill at all if the market never reaches your price.
A buy limit order executes at your limit price or lower.
A sell limit order executes at your limit price or higher.
This trade-off of price control in exchange for no execution guarantee, is the defining feature of a limit order, and it's why they sit at the core of every serious trading strategy.
How Limit Orders Work on Grvt
Grvt is a hybrid derivatives exchange. Orders are matched off-chain for CEX-like speed, but settled on-chain so users keep control of their assets.
On Grvt:
Limit order: You set the price you want to buy or sell at. The trade only executes at that price or better.
Market order: You don't set a price. The order executes immediately against the best available price and is always treated as a taker.
When you place a limit order on Grvt, you also choose how it behaves if it can't fill immediately, via Time in Force:
GTT (Good-Till-Time): Your order stays open until it’s completed, you cancel it, or it reaches the expiry time. It can be filled bit by bit.
IOC (Immediate-Or-Cancel): Your order tries to fill immediately. Whatever can’t be filled right away is automatically cancelled.
FOK (Fill-Or-Kill): Your entire order must be filled immediately. If that’s not possible, nothing happens and the whole order is cancelled.
AON (All-Or-Nothing): Your entire order must be filled at once, but unlike FOK, it can wait until enough is available to complete the full order.
You can also flag a limit order as:
Post-Only: Your order will only go through if it can be placed on the order book and wait for someone else to trade against it. If it would execute immediately, it’s cancelled instead. This ensures you’re always treated as a maker.
Reduce-Only: Your order can only make an existing position smaller or close it completely. It cannot increase your position or accidentally open a new one in the opposite direction.
Why Traders Use Limit Orders
1. Price control. You decide the worst price you're willing to accept. This is useful in volatile markets where a market order could suffer significant slippage.
2. Lower trading costs. Limit orders usually qualify for lower maker fees because they add orders for others to trade against. On Grvt, maker rebate programs can reduce your trading costs even further and in some cases, you can get paid for placing the trade.
3. Entering and exiting at planned levels. Traders who have identified support/resistance zones, technical setups, or specific risk/reward levels use limit orders to automate entries and exits without needing to watch the market constantly.
4. Building or unwinding large positions. Placing size directly into the market with a market order can move the price against you. Limit orders, especially when split across price levels, let large traders and market makers work into or out of a position more quietly.
Who Uses Limit Orders
Retail traders who want a specific entry or exit price rather than "whatever the market gives me right now."
Market makers and liquidity providers, who live almost entirely on the maker side of the book, quoting two-sided limit orders to earn the spread and rebates.
Algorithmic and systematic traders, who use limit orders as building blocks for more advanced execution strategies (laddering, scaling, chasing).
Institutions and large traders, who need to move meaningful size without single-handedly moving the market against themselves.
Long-term position builders, who are comfortable waiting for their price rather than paying up for immediate execution.
The Trade-Off to Remember
The core risk of a limit order is simple: it might never fill. If the market moves away from your price, your order just sits there. This is the reason more advanced order types exist such as the Scale Order (which ladders multiple limit orders across a price range) and dynamic, market-tracking limit strategies like chase orders, which we’ll cover next.