Perp Order Types, Explained
Market, limit, stop, scale, TWAP and chase orders: what each one does, when it helps, and the mistake each one invites.
Market
Takes whatever the book offers until your size is filled. Certain to execute, uncertain in price. On a thin book a market order can walk several levels and fill far from where you clicked, which is what the maximum slippage setting exists to prevent.
Limit
Executes only at your price or better. Certain in price, uncertain in execution. Limit orders posted away from the market add liquidity and earn the maker fee rather than paying the taker fee.
Time in force controls what happens to the remainder. GTC rests until filled or cancelled. IOC fills what it can immediately and cancels the rest. ALO (post-only) cancels outright if the order would cross the book, which guarantees maker treatment.
Stop market and stop limit
Dormant until the mark price reaches a trigger, then submitted as a market or limit order. The standard use is a protective stop under a long or above a short.
The mistake is placing the trigger on the wrong side of the mark. A stop on a long belongs below the mark price; put it above and it fires instantly. A stop limit also has a second failure mode: if price gaps through your limit, the order triggers but never fills, and you are still in the position you meant to exit.
Take profit and stop loss
The same trigger machinery pointed the other way. A take profit on a long sits above the mark; a stop loss sits below. Both can be attached to an order as it is placed, so protection exists from the moment the position does rather than whenever you remember.
Scale
Splits one order into several limit orders spread between a start and an end price. Useful when you have a zone rather than a level, and useful for avoiding the particular regret of filling your whole size at the worst tick of a range.
TWAP
Breaks an order into slices executed evenly over a chosen duration. The point is to reduce market impact on size that the book cannot absorb at once. Randomising slice timing makes the pattern harder for others to detect and trade against.
Chase
Repeatedly re-prices a limit order to stay at the front of the book, chasing the market until filled. It gets you maker pricing on an order you actually want done. On a fast-moving market it can also chase you into a much worse price than you intended, so it wants a bound.
Reduce only
A flag, not an order type. It guarantees the order can only shrink an existing position, never open or flip one. Worth setting on every exit order: it is the cheapest protection against a fat-fingered close turning into a reversed position.
Last updated 2026-09-24