Limit and Market Orders
Limit order · Market order
A limit order buys or sells at a price you set; a market order sets no price and fills at once at the best prices on the order book.
Simple explanation
Background: Orders work on Korean exchanges much as anywhere else, with a few local details: prices are in won, limit prices must follow the exchange's tick sizes, and on Upbit a market buy is entered as an amount of won rather than a number of coins.
Every exchange has an order book: buy orders (bids) and sell orders (asks) stacked by price. A trade happens when a buy price meets a sell price, and the way you place your order makes it a limit order or a market order.
A limit order names both price and quantity, such as "buy 100 coins at ₩1,000". It fills only at your price or better; if nobody matches it, it waits on the order book until it fills or you cancel it. It can fill only partly, and while it waits, the money (or the coins, for a sell) is locked and cannot be used for other orders.
A limit buy priced above the lowest ask fills at once, working up from the lowest ask to your price but never above it. Limit prices must sit on the exchange's tick size, the price steps it allows.
A market order sets no price and fills immediately against the best prices on the book. On Upbit you enter the amount of won to spend for a market buy and the number of coins for a market sell. It is fast, but with a large order or a thin order book it runs through several price levels, and you end up buying higher or selling lower than you expected. That difference is slippage.
Some exchanges charge different fees for an order that rests on the book and fills later (maker) and one that fills against resting orders at once (taker). A market order is always a taker; a limit order is a taker if it fills at once and a maker if it waits first. Rates differ by exchange, membership tier and promotion.
Slippage tends to be biggest on thinly traded coins, right after a listing and when prices move fast. That is why Korean exchanges may block market orders and take only limit orders for a while after a new listing. Some exchanges also offer stop (conditional) orders that are placed when the price reaches a level you set.
It matters for the kimchi premium too. A price table works out the premium from one price, but a real trade fills along the order book, so the premium at your actual average price can differ from the one on screen. CoinGaja's Kimchi Premium Calculator fills your amount level by level through the live order books, so slippage is part of its result.
Example
Asks on the order book: ₩1,000 for 1,000 coins · ₩1,010 for 1,000 coins · ₩1,020 for 3,000 coins
Market buy of ₩2,010,000 → ₩1,000 × 1,000 + ₩1,010 × 1,000 = 2,000 coins filled → average price ₩1,005 (0.50% above the lowest ask = slippage)
On the same book, a limit buy of 2,000 coins at ₩1,000 instead → only 1,000 coins fill at once; the other 1,000 wait until someone sells at ₩1,000 (a partial fill)
If the overseas price in won is ₩980 → the premium at ₩1,000 is +2.04%, but at your market-buy average of ₩1,005 it is +2.55%
Fees are left out
※ Example numbers, for illustration only
See it on CoinGaja
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