Order Types & Market Mechanics
An overview of common order types and how real-world market mechanics like slippage, partial fills, and fees affect execution outcomes.
Airavat submits orders to your exchange. How those orders are filled, priced, and settled is determined by market mechanics, not by Airavat.
This page explains the most common order types and execution behaviors you’ll encounter, and why actual outcomes may differ from expectations.
Market Orders
A market order instructs the exchange to execute immediately at the best available prices.
Key characteristics
Fast execution
No price guarantee
Subject to slippage
Can fill across multiple price levels
Market orders prioritize execution certainty, not price precision.
If liquidity is thin or the order size is large, the final average fill price may differ from the last traded price you saw.
Limit Orders
A limit order specifies the maximum price you’re willing to buy at, or the minimum price you’re willing to sell at.
Key characteristics
Price certainty
No execution guarantee
May partially fill or not fill at all
Can remain open until cancelled or expired
Limit orders trade speed for control.
If the market never reaches your limit price, the order will not execute.
Partial Fills
Orders may fill in pieces rather than all at once.
This happens when:
Available liquidity is limited
Your order size exceeds immediate market depth
Price moves during execution
Partial fills are normal behavior and are handled by the exchange, not Airavat.
Slippage
Slippage is the difference between the expected price and the actual execution price.
Common causes:
Market orders during volatility
Large order sizes
Low-liquidity markets
Rapid price movement
Slippage is not an error. It is a natural consequence of real-time markets.
Fees
All trades incur exchange fees.
Fees depend on:
Market (spot vs derivatives)
Maker vs taker execution
Your exchange fee tier
Airavat does not modify or optimize fees. All fees are charged directly by the exchange.
Spot vs Derivatives (High-Level)
Different markets behave differently.
Spot
You buy or sell the underlying asset
No leverage
No liquidation risk
Derivatives (Futures / Perpetuals)
You trade contracts, not the underlying asset
Leverage may apply
Subject to margin requirements and liquidation
Airavat does not abstract these differences. You are responsible for understanding the market you are trading.
Reduce-Only & Close Semantics
Certain orders are intended only to reduce or close an existing position.
Reduce-only behavior ensures that:
An order cannot increase exposure
Execution only happens if a position exists
Incorrect use of reduce-only or close instructions is a common source of confusion. Always review confirmations carefully.
Order Rejection & Exchange Errors
Orders may be rejected by the exchange for reasons such as:
Insufficient margin
Exceeding position limits
Invalid order parameters
Market restrictions
Permission issues
If an order is rejected, no execution occurs. Airavat reports the exchange response but cannot override it.
Why Outcomes May Differ From Expectations
Unexpected outcomes usually stem from:
Slippage during fast markets
Partial fills
Fees not factored into expectations
Market vs limit trade-offs
Exchange-specific rules
Understanding these mechanics is essential to interpreting results correctly.
Responsibility Reminder
Airavat submits orders. Markets determine outcomes.
Execution behavior is governed by:
Market conditions
Liquidity
Exchange rules
Airavat does not guarantee fills, prices, or performance.
What’s Next
The next section covers:
Automation, schedules, and agents
How recurring execution works
What automation can and cannot do
How control and permissions apply to automated actions
Understanding mechanics makes automation safer.
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