Limit Orders | Spot Trading & Execution

SPOT TRADING & EXECUTION · ORDER TYPES

A limit order specifies the worst acceptable price for an execution: a buy may trade at the limit price or lower, while a sell may trade at the limit price or higher. It controls price but does not guarantee that any quantity will fill.

Risk first. A limit order can remain unfilled while the market moves away, or fill just before price moves adversely. Price control therefore creates non-fill and adverse-selection risk; it does not create execution certainty.

Last reviewed: 21 August 2026 · Educational content only

Concept
Maker vs taker
Queue
Worked example
Mistakes
Checkpoint
FAQ
Summary

Price control, not execution certainty

A buy limit at £79,500 permits fills at £79,500 or better (lower). A sell limit at £81,000 permits fills at £81,000 or better (higher). If the market never reaches an executable price while the order remains active, it can receive no fill at all.

A limit order can also execute immediately. If the best ask is £80,000 and you submit a buy limit at £80,100, the order is marketable and can consume existing asks up to the limit.

Common misconception: “limit” does not mean “maker”. Whether the order adds or removes liquidity depends on whether it crosses the book when accepted.

Resting versus marketable limit orders

Instruction	Book state	Likely behaviour	Main risk
Buy limit below best ask	Does not cross	Rests as bid / may add liquidity	Non-fill or adverse selection
Buy limit at/above best ask	Crosses available asks	Executes immediately up to limit	Partial fill if size exceeds available liquidity
Sell limit above best bid	Does not cross	Rests as ask / may add liquidity	Non-fill or adverse selection
Sell limit at/below best bid	Crosses bids	Executes immediately down to limit	Partial fill / market moves through levels

Maker economics

A resting limit can qualify for a lower maker fee or rebate, but fee advantage is not free if fills occur when informed flow is moving against you.

Taker protection

A marketable limit can behave like a market order while imposing a worst execution price.

Queue position and fill probability

On a price-time-priority venue, orders at a better price rank first. Among orders at the same price, earlier accepted orders normally rank ahead. If 100 BTC is already bid at your chosen price and only 10 BTC trades there, your order may not fill even though the market “touched” the level.

Displayed queue size is also imperfect: orders can cancel, hidden liquidity may exist and some venues use alternative priority models.

Touch ≠ fill. A chart showing the market traded at your limit price does not prove your specific order had sufficient queue priority to execute.

Worked example

Best ask is £80,000. You want up to 2 BTC but refuse to pay above £80,100, so you submit a buy limit for 2 BTC at £80,100.

The book contains 0.5 BTC at £80,000, 0.8 BTC at £80,050 and 0.4 BTC at £80,100. The order can immediately fill 1.7 BTC. The remaining 0.3 BTC can rest at £80,100 if the order's time-in-force permits.

Immediate cost = (0.5×80,000) + (0.8×80,050) + (0.4×80,100) = £136,080 Immediate average = £136,080 ÷ 1.7 ≈ £80,047.06

The limit protected the order from paying above £80,100 but did not guarantee the full 2 BTC.

Common mistakes and misunderstandings

Assuming every limit order is a maker order.
Treating a market touch at your price as proof that your order filled.
Ignoring queue position and time priority.
Using a limit so far from the market that the order no longer serves the intended execution objective.
Forgetting that a partially filled remainder can stay live depending on time-in-force.

Execution discipline: Define whether your priority is price protection, passive liquidity provision or immediate execution. The same limit-order form can express very different intentions.

Knowledge checkpoint

Q1. Why can a buy limit at £80,100 execute immediately when the best ask is £80,000?

Q2. Why might your order not fill even though trades print at your exact limit price?

Q3. What does a buy limit guarantee about price, and what does it not guarantee about quantity?

Q4. When can a marketable limit be preferable to an unrestricted market order?

Self-check: A strong answer should explain both the order instruction and the execution consequence, including what can happen if liquidity or venue state changes.

FAQ

❓ Does a limit order guarantee my price?

It sets a worst acceptable execution price, but the order can fill at that price or better and may not fill at all.

❓ Is a limit order always maker?

No. A limit that crosses the opposite side can remove liquidity and be classified as taker.

❓ Can a limit order partially fill?

Yes. Available liquidity can fill only part of the quantity, with the remainder handled according to the time-in-force.

❓ Why did price touch my limit without a fill?

Orders ahead of you in the queue may have consumed the available liquidity, or venue priority rules may differ.

Summary

Limit orders control worst acceptable execution price but do not guarantee fills.
A crossing limit can execute immediately and behave as taker liquidity.
Passive fills depend on price priority, queue position and available opposite-side flow.
Time-in-force determines what happens to an unfilled remainder.

This building block explains execution mechanics and risk. It is not a recommendation, signal or instruction to trade any cryptoasset.