Take limit orders are the inverse of stop limit orders, allowing you to close out a position at a predetermined level.
Take limit orders are the same as take profit orders but are executed as limit orders, and therefore there are more order flags available. In this article, we’ll show you how to use take limit orders on Interdax and provide an example of this order type.
Take Limit Order Example
Suppose you are long 10,000 BTC-PERP contracts at $10,000 and set a take limit order with a trigger price of $11,000 and a limit price of $10,990. Assume quantity is 10,000 for the take limit order. Once the mark price (=index price) reaches the trigger price of $11,000, a limit order to sell 10,000 contracts will be submitted with a limit price of $10,990. Once the mark price reaches $10,990, the take limit order is executed and closes the long position at a profit. With take limit orders, no trading fees apply since the maker fee is 0.00% (unless the order is executed immediately, in which case taker fees apply).
As with general limit orders, take limit orders can be used with different order flags (such as GoodTillCancelled, ImmediateOrCancel, Reduce Only and Post Only). You can use the reduce-only order flag with take limit orders, which ensures that these orders are only executed if you are currently in a position.
For example, a trader is long 10,000 BTC-PERP contracts with a fill price of $10,000 and sets a reduce-only take limit order with a limit price of $10,990 and trigger price of $11,000. If the 10,000 contract position is closed before the take profit order is filled, once mark price hits $11,000 the reduce-only order is amended to 0 contracts and cancelled, since there is no position to reduce.
As with take profit orders, take limit orders can be used in conjunction with stop orders to pre-define your risk and reward. When using reduce-only order flags for both stop and take limit orders, this ensures that your position is not unintentionally increased.
For example, if you are long from $10,000 with a take limit sell order with a limit price of $10,990 and a trigger price of $11,000. Assume there’s also a stop loss sell order at $9,950. Without reduce-only order flags, the price could dive to $9,950 then rises sharply to $11,000. The stop loss at $9,950 closes your position and then an unintentional short position is opened due to the take limit order.
Similarly, the price may rise to $11,000 then $10,990 and your trade is closed out for profit, but if the market moves south, you will enter a short position at $9,950 if the stop loss order does not have the reduce-only flag.
How to Use Take Limit Orders
Take limit orders appear in the order book once the stop price is reached and can be used with the different order flags, including reduce-only.
To set a take limit order, go to the order panel, and select 'Take Limit'. Then enter the trigger price and stop price (or use the sliders).
Select the desired order flag (GoodTillCancel, ImmediateOrCancel, Reduce Only or Post Only).
Once you have set the order flag, quantity and stop/trigger price, click on ‘Set Sell Trigger’ or ‘Set Buy Trigger’. After the take limit order is confirmed, the order will appear in the ‘Conditionals’ tab of the positions panel (shown below).
Once the mark price hits the trigger price of $10,375, the limit order is added to the order book and is executed at the limit price of $10,50. Once the mark price reaches $10,350, the order is executed and can be used to exit a long position at a certain price level/profit level.
You can drag the take limit order on the chart to amend the stop/trigger price. The difference between the stop and trigger price will remain constant when dragging orders on the chart, while you can modify each separately from the positions panel.
To adjust the number of contracts for a take limit order, click on the quantity on the chart or amend the number of contracts from the ‘Conditionals’ tab of the positions panel.
You can cancel a take limit order from the Conditionals tab of the positions panel or click on the X on the chart, shown below.