What is a limit order?
*Limit orders are currently available on the Swan Mobile App for Swan Private clients.
A limit order lets you buy Bitcoin at a specific price you choose. When you place it, you set the price you’re willing to pay, and your order joins an order book, waiting until the market price matches your selection for execution. This gives you precise control over what you pay, ensuring you get Bitcoin at exactly your chosen price.
How does a limit order work on Swan?
- Price Below Market: When setting a limit order, your chosen price must be lower than the current market price. This ensures you're aiming for a better deal than what's available right now.
- Order Duration: Your limit order stays active for up to 90 days. If the market doesn't reach your price within that time, the order will automatically expire.
- Partial Fills: Sometimes, only part of your order may be filled if there isn't enough Bitcoin available at your specified price. For example, if you want to buy 1 BTC at $100,000 but only 0.5 BTC is available at that price, you'll get 0.5 BTC, and the remaining order stays open until it's filled, canceled, or expires.
- No Guarantees: Market conditions can change quickly, so there's no guarantee your order will be fully executed, even if the price briefly hits your target.
- Buy Orders Only: Currently, Swan only supports buy limit orders. Sell orders are not available.
What happens when I place a limit order?
When you place a limit order, you have two options to fund it: either from your USD balance or via ACH. Here’s how each works:
- USD Balance: If you choose to use your balance, the required amount is immediately reserved from your available funds. These reserved funds are locked and cannot be used for anything else until your order is filled, expires, or you cancel it.
- Funding via ACH: If you opt for ACH, Swan initiates an ACH transfer to pull the necessary funds from your bank account. Once pulled, these funds are reserved for your order and are unavailable for other use until the order is completed, expires, or is canceled.
Important: If the ACH transfer is reversed during the lockup period, Swan will sell the Bitcoin associated with your order. You will be responsible for any loss if the Bitcoin is sold at a price lower than your purchase price.
How do limit orders interact with daily buy limits?
For security and risk management, limit orders are subject to your daily ACH buying limit at the time you place the order. When you set a limit order, Swan checks that the order amount does not exceed your daily allowed purchase limit. If it does, the order may not be accepted.
Can I cancel my limit order?
Yes, you can cancel your limit order at any time before it is fully filled, as long as the order hasn't already started executing. Once canceled, any reserved funds will be immediately released back to your balance.
Note: If your order has partially filled, you can still cancel the remaining unfilled portion.
What should I consider when placing a limit order?
- Existing Orders: Limit orders may take time to execute or might only partially fill. Keep this in mind when planning other purchases, as you might have pending orders when considering an instant buy.
- Available Funds: Once you place a limit order, the funds are reserved and unavailable for other use until the order is filled, canceled, or expires. Make sure you're comfortable with locking up those funds for up to 90 days.
- Likelihood of Execution: Bitcoin's price can be volatile, but it's important to set a price that balances your goals with the likelihood of the market reaching that level. Setting a price too far below the current market might mean your order never fills.
Tips for Using Limit Orders Effectively
- Set Realistic Prices: Research market trends and historical prices to set a price that's achievable within your 90-day window.
- Monitor Your Orders: Even though limit orders are "set and forget," it's a good idea to check in occasionally, especially if market conditions change.
- Use Multiple Orders: Consider placing several limit orders at different price points to take advantage of market dips and average your cost over time.
- Balance with Instant Buys: If you're worried about missing out on a price, you can always cancel your limit order and switch to an instant buy to secure Bitcoin immediately.