A Post Only order is an advanced limit order mode that ensures the user acts only as a Maker. When Post Only mode is enabled, the submitted limit order will not be immediately matched with existing market orders. If the system detects that the Post Only order would immediately execute against an existing order, it will automatically cancel the order.
Advantages of Post Only Mode
Post Only mode ensures that users' limit orders do not execute immediately (preventing them from becoming Takers). Instead, users remain Makers, providing liquidity to the market. This allows them to benefit from lower Maker fees rather than paying higher Taker fees.
Example
In a highly volatile market, BTC has dropped to 10,005 USDT. You want to buy 10 BTC at 10,000 USDT and place a limit order. However, the price continues to fall, quickly reaching 9,995 USDT.
Scenario 1: Without Post Only Mode
If Post Only mode is not enabled, your 10,000 USDT buy order for 10 BTC will immediately execute as the price drops to 9,995 USDT. This makes you a Taker, meaning you will pay a higher Taker fee and miss the opportunity to buy BTC at a better price.
Scenario 2: With Post Only Mode
If Post Only mode is enabled, the system will detect that your 10,000 USDT buy order would execute immediately at 9,995 USDT and will cancel the order. As a result, you avoid paying additional Taker fees and gain the opportunity to adjust your strategy for a better price.
Who Benefits from Post Only Mode?
For quantitative trading institutions and market makers, Post Only mode ensures they always act as liquidity providers, helping them save significant transaction fees compared to other order strategies. Additionally, for traders engaged in arbitrage strategies during highly volatile market conditions, Post Only mode helps prevent unnecessary fees from rapid order execution while allowing for strategy adjustments to maximize potential profits.