One last type of instruction that can be embedded into the logic of an order is the “post-only” option, which makes sure that an order is placed if and only if it cannot be immediately filled.
If a buy (or sell) immediately matches an opposite sell (or buy), the orders are crossed, resulting in a trade. Many times, a trader actually does not want to place an order if it will be filled immediately by another resting order — the trader wants to avoid paying the taker fee when placing limit orders. This is tied to the nature of makers and takers that we previously discussed. Generally speaking, exchanges will have notably lower fees attached to limit orders than they will for market orders, as they are the ones providing liquidity. Hence, post-only orders basically say, “Only place this order if it is going into the order book and not being immediately filled, avoiding the possibility of paying a taker fee.”
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