Spot trading: limit orders, market orders, and the order book
How spot orders work: the book, limit orders, and market orders, and how to read depth before you trade.
1. Spot means you hold the asset
Spot is a direct exchange. If you buy 1 BTC for 60,000 USDT, that BTC is credited to your spot balance. You can hold it, move it to an earn product if one is open, or withdraw it when withdrawals are available.
Unlike a derivative, a spot balance is not liquidated because the price moved. You can still lose most or all of the value if the asset’s price falls.
2. Limit orders and market orders
A limit order uses a price you set. If the market is 61,000 USDT and you bid 60,000, the order rests until the market trades at that price or better. The price is controlled; the fill is not guaranteed.
A market order takes the best prices currently on the book. It is more likely to fill immediately. In a fast market the average price can be worse than the last trade. That difference is slippage.
3. Depth and the order book
Bids are buy orders and asks are sell orders. The gap between the best bid and the best ask is the spread. A depth chart plots price against cumulative size. Large resting size can show where liquidity is stacked, not a guaranteed floor or ceiling.
Takeaways
- 1Spot gives you the asset. There is no liquidation price, which suits people who plan to hold. The asset can still lose value.
- 2Use a limit order when the price matters. Use a market order when getting a fill matters more than the exact price.
- 3Watch depth and the spread. Splitting a large order can reduce slippage. It does not remove it.
Check it on live markets