📈Orderbook, Order Types, Fees

⚡Orderbook

The orderbook is LN Exchange’s primary edge in the context of a performant trading engine. Liquidity is augmented as positions from pairwise LP markets populate the orderbook.

Limit orders are placed on the book and held in the bids and asks fields of the Market. Orders are matched by price-time priority: orders are executed based on the best price, and if multiple orders are at the same price, the order with the earliest time will be matched first.


⚡Order types

Market

A Market Order is an order to buy or sell an asset right away at the best available price. It's used when you prioritize speed over getting a specific price.

Limit

A Limit Order is an order to buy or sell an asset at a specific price or better. It gives you control over the price but may not execute if the market doesn't reach your desired level.


⚡Order options

Take Profit

Automatically closes a position to secure profits when the asset hits a certain price level.

Stop Loss

Automatically closes a position to limit losses when the asset hits a certain price level.

Trigger

A Trigger Order is a conditional order that becomes active and executes when a specified trigger price is reached. It helps automate trading decisions and execute trades based on predefined conditions.

Post Only Order

A Post Only order ensures that your order is only added to the order book as a maker order, meaning it won’t be immediately filled by an existing order. If the order matches an existing order (thus making you a taker), it is canceled. This guarantees that you will earn the maker fee, which is typically lower than the taker fee.

Use Case

  • Traders focused on fee reduction: Traders who want to minimize fees by ensuring they always act as makers (who provide liquidity) rather than takers (who remove liquidity).

  • Market makers: Participants who consistently post limit orders to maintain liquidity in the market.

Immediate or Cancel (IOC)

An IOC order attempts to fill as much of the order as possible immediately. Any portion of the order that cannot be filled right away is canceled. This type of order is useful when you want to execute a trade quickly but are willing to forgo any unfilled portion.

Use Case

  • Traders needing quick execution: Traders who prioritize speed and want to take advantage of current market prices without waiting for the entire order to fill.

  • High-frequency traders: Traders or algorithms looking to execute trades rapidly and efficiently.

Fill or Kill (FOK)

A FOK order requires that the entire order be filled immediately or not at all. If the full order cannot be executed instantly, the order is canceled. This type of order is useful when partial fills are not acceptable, and you need to ensure the complete transaction occurs at once.

Use Case

  • Traders requiring certainty: Traders who need the entire quantity of an order to be executed at once or not at all, often to ensure a specific position size.

  • Institutional traders: Larger traders or institutions managing substantial positions who cannot afford to have only part of an order filled due to price slippage or other strategic reasons.


Fees

[TBD]

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