Using the Order Book
Understanding the Order Book is key to becoming an advanced trader.
In our previous tutorial on Making your First Trade, we learned about market orders. In a market order, your trade executes instantly at the current market price.
But what if I think the market price is too high, and want to set a specific price that I would be willing to accept? I would use a limit order.
Limit orders only execute when the market trades at your desired price.
For example, if the highest I am willing to pay for a share of Trump “Yes” in the 2024 Republican Nomination is 72c, but the current market price is 73c, I could create a limit order at 72c and wait until someone is willing to sell me Yes shares at my desired price.
How to Make a Limit Order
- In the buy modal, select ‘limit’ in the order type dropdown.
- Enter the price you are willing to buy (or sell, if you’ve selected to sell) shares at.
- Enter the number of shares you want to buy or sell at that price.
- OPTIONAL: Set an expiration date for your limit order. This means that if the order does not execute at your desired price within this timeframe, it will be canceled.
- Click ‘Buy’
Viewing the Order Book
The order book is a list of every open order to buy or sell shares in a particular market.
In this market, “Who will win the US 2024 Republican presidential nomination”, we are viewing the order book for Trump “Yes” shares.
The green side represents the “bid”: the highest price traders are willing to pay to buy Trump “Yes” shares.
The red side represents the “ask”: the lowest price traders are willing to accept to sell Trump “Yes” shares.
Managing Open Orders
When you have an open order, you’ll be able to see it in the order book.
As you can see, I have an open order to buy 20 Yes shares at 70c. So far, 0 shares have been ‘filled’ from my order.
To cancel the order, I can simply click the red ‘x’ button visible when hovering over the order.
If you want to view only your orders, click the ‘open orders’ tab.
If you have open orders in multiple markets, it’s easier to manage and monitor them on the Portfolio page.
Nice! You can officially call yourself an advanced trader.
If some of this still isn’t making sense, feel free to reach out to us on Discord. We’re happy to help get you up to speed.