What is a post-only order?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 4 min
In short
A post-only order is accepted only if it rests on the book as a maker; if it would execute immediately it is cancelled instead. It is used to avoid taker fees, at the cost of sometimes not trading at all.
Key points
- Accepted only when it can rest on the book
- Cancelled automatically if it would fill at once
- Guarantees maker treatment for fee purposes
- May end up not trading at all
Definition
A limit order carrying a condition that it must rest on the book: if it would execute immediately on submission, it is cancelled rather than filled.
A limit order priced across the opposing quote executes immediately and is treated as a taker. Adding the post-only flag means that, instead of filling, the order is simply cancelled. Anything that does fill is therefore guaranteed to be on the maker side of the fee schedule.
The reason to use it is fee certainty. Most exchanges charge makers and takers differently, and often favour makers. But both the rates and whether any such advantage exists vary by venue and change over time, so check the schedule of the exchange you actually use.
The trade-off is execution risk. Submitted into a moving market, the order can be cancelled over and over and never reach the book. When getting filled matters more than the fee, post-only is the wrong tool.
Watch out for
- · A silent cancellation can leave you without the position or the exit you thought you had
- · Fee tiers and any maker advantage differ by exchange and can change
- · It is unsuitable where execution must be certain, such as closing a losing position