What factors contribute to the considerable difference between limit and market prices on Binance?

3 answers

• Dec 18, 2021 · 3 years ago
  The considerable difference between limit and market prices on Binance can be attributed to several factors. Firstly, limit orders allow traders to set a specific price at which they are willing to buy or sell a cryptocurrency. These orders are placed on the order book and are executed only when the market price reaches the specified level. On the other hand, market orders are executed immediately at the current market price. The difference between these two types of orders arises from the fact that the market price is constantly changing due to supply and demand dynamics. As a result, the market price may deviate from the price specified in a limit order, leading to a difference between the executed price and the expected price. Additionally, market liquidity plays a crucial role in the difference between limit and market prices. If there is low liquidity in a particular cryptocurrency pair, executing a market order can cause a significant price impact, resulting in a higher or lower executed price compared to the current market price. This price slippage is more likely to occur in illiquid markets or during periods of high volatility. Furthermore, market manipulation can also contribute to the difference between limit and market prices. In some cases, large traders or market makers may intentionally create artificial price movements to trigger stop-loss orders or to take advantage of the price difference between limit and market orders. These manipulative practices can distort the market and lead to a considerable difference between the executed price and the expected price. Overall, the difference between limit and market prices on Binance is influenced by the nature of these order types, market liquidity, and the potential for market manipulation.
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• Dec 18, 2021 · 3 years ago
  The considerable difference between limit and market prices on Binance can be quite puzzling for many traders. Let's break it down. When you place a limit order on Binance, you are essentially setting a specific price at which you want to buy or sell a cryptocurrency. This order is added to the order book and will only be executed when the market price reaches your specified level. On the other hand, a market order is executed immediately at the current market price. So, the difference between these two types of orders lies in the fact that the market price is constantly changing based on supply and demand. Now, why does the market price deviate from the price specified in a limit order? Well, it's all about market dynamics. The constant buying and selling of cryptocurrencies by traders can cause the market price to fluctuate. This means that when you place a limit order, there's a chance that the market price may not reach your specified level, resulting in a difference between the executed price and the expected price. Another factor to consider is market liquidity. If there is low liquidity in a particular cryptocurrency pair, executing a market order can cause a significant price impact. This means that the executed price may be higher or lower than the current market price, leading to a difference between limit and market prices. Lastly, market manipulation can also contribute to the difference between limit and market prices. Unfortunately, the cryptocurrency market is not immune to manipulative practices. Some traders or market makers may intentionally create artificial price movements to trigger stop-loss orders or to take advantage of the price difference between limit and market orders. This can distort the market and result in a considerable difference between the executed price and the expected price. In conclusion, the considerable difference between limit and market prices on Binance is influenced by market dynamics, liquidity, and the potential for market manipulation.
  2022674
• Dec 18, 2021 · 3 years ago
  When it comes to the considerable difference between limit and market prices on Binance, there are a few key factors at play. First and foremost, it's important to understand the difference between these two types of orders. A limit order allows you to set a specific price at which you want to buy or sell a cryptocurrency, while a market order is executed immediately at the current market price. Now, why does the market price sometimes deviate from the price specified in a limit order? Well, it all comes down to supply and demand. The constant buying and selling of cryptocurrencies by traders can cause the market price to fluctuate. This means that even if you set a specific price in your limit order, the market price may not reach that level, resulting in a difference between the executed price and the expected price. Another factor to consider is market liquidity. If there is low liquidity in a particular cryptocurrency pair, executing a market order can have a significant impact on the price. This means that the executed price may be higher or lower than the current market price, leading to a difference between limit and market prices. Lastly, it's worth mentioning that market manipulation can also contribute to the difference between limit and market prices. While Binance takes measures to prevent manipulation, it's important to be aware that the cryptocurrency market is not immune to such practices. Some traders or market makers may engage in manipulative tactics to create artificial price movements, which can distort the market and result in a considerable difference between the executed price and the expected price. In summary, the considerable difference between limit and market prices on Binance is influenced by supply and demand dynamics, market liquidity, and the potential for market manipulation.
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