Market Order
An order to buy or sell a cryptocurrency immediately at the best available current price. Market orders guarantee execution but not a specific price. In low-liquidity markets, large market orders can cause significant slippage as they consume multiple price levels in the order book.
“Placing a market buy order for $10,000 of Bitcoin on Coinbase will execute instantly at the current best ask price. In a liquid market, slippage is typically negligible for this size.”
Limit Order
An order to buy or sell a cryptocurrency at a specific price or better. A buy limit order executes at the limit price or lower, while a sell limit order executes at the limit price or higher. Limit orders provide price control but may not execute if the market never reaches the specified price.
Order Book
A real-time list of all open buy orders (bids) and sell orders (asks) for a trading pair on an exchange, organized by price level. The order book shows market depth and the spread between the highest bid and lowest ask. Centralized exchanges and some DEXs use order books to match buyers with sellers.
Slippage
The difference between the expected price of a trade and the actual executed price. Slippage occurs due to low liquidity, large trade sizes relative to pool depth, or market movement during the time between submitting and executing a transaction. In DEXs, users can set slippage tolerance — the maximum acceptable price deviation — to protect against excessive slippage, though setting it too tight can cause transactions to fail.