Crypto traders use different tools as a way of improving their potential profits and reducing losses. One of these methods is the crypto order. Crypto orders like market orders, limit orders, and stop orders are used in reducing the loss level that a portfolio faces. When choosing the crypto order to use, there is an important concept that should not be ignored, and that is the time in force concept. It is the parameters that should be disclosed when the trader is opening a crypto trade, and it discloses the conditions that dictate the expiry.
Below are some time-in-force parameters for crypto trading.
Good ‘til canceled (GTC)
This gives the crypto exchange the instruction that trade should remain open till it is canceled manually or it ends up being executed. In typical crypto exchanges, this is the default, meaning that traders may not need to choose this option.
The crypto trading platform just assumes that the trader wants the crypto trade to remain open until they either execute it or close it by themselves.
Immediate or cancel (IOC)
This type of order states that if a part of an order has not been filled instantly, it should be canceled. For instance, if a crypto trader chooses this parameter, and the trade is not executed immediately based on the decided price, then it should be closed.
Let’s say a crypto order was made for 12 ETH for $1,000 and only 5 ETH was bought at that price, the remaining 7 ETH should be canceled immediately.
Fill or kill (FOK)
This type of order means that it should be filled instantly or the transaction should be canceled. Using a similar example above. If the crypto order of 12 ETH at $1,000 was made, and the exchange is unable to satisfy the full amount, then the order should be canceled. The trader does not want it to be filled partially.