It is technically possible to have this type of market, if the limit orders are triggered by:
- 1) the index price, instead of market orders
- 2) stops / liquidations
- 3) market orders from an internal dealing desk
In such case the exchange would need to actively deal with automatic deleverage to keep the open interest of long and short positions sufficiently similar, and pay users' gains out of pocket while collecting payments from their losses.
Regarding BBO orders, this is the entirety of my discussion with customer care, which explain that BBO is a shortcut functionality to submit a limit order and set its price equal to the best entry currently listed in the order book. (When I wrote this I understood BBOs as market orders.)
The documentation page "Trading rules for perpetual swaps" (*) describes "BBO" among the type of orders the user can submit. By the description, this seems to be what is commonly called a market order.
However the documentation doesn't clarify whether a BBO order matches only the first best entry from the order book, or if it traverses all the necessary entries in the order book until the whole quantity is filled.
*
https://www.huobi.com/support/en-us/detail/900000088923Hello, the following is a detailed answer to your question:
BBO (Best Bid Offer) order: If the user selects BBO to place an order, the user is only required to enter the quantity, and the system will take the latest price of the opponent at the moment receiving this order (if the user is a buyer, the BBO price is the sell_one price; if the user is a seller, the BBO price is the buy_one price) to place an order.
This means that when you use BBO to place an order, the system will quickly place an order according to the latest buy price or sell price of the market at that time.
For example, the current ETH market price is 1700 USDT, and the commission price of buyer one at this time is 1699 USDT,The commission price for seller one is 1702USDT.
When you use BBO to place an order and buy one ETH, the BBO price is the sell_one price
the system will create an order for the buy of 1 eth at a price of 1702USDT
The online FAQs and the previous answer are ambiguous.
Suppose the orderbook for ETH/USD perpetual swaps contains these 2 entries on
the ASK side:
price (USD), quantity (contracts)
1702, 10
1701, 5
I send a BBO order to Huobi to open 6 LONG contracts.
Does the order immediately open 5 contracts at 1701 USD, and also immediately
opens 1 contract at 1702 USD, for a total of 6 contracts?
Hello, the following is a answer to your question:
BBO (Best Bid Offer) order: If the user selects BBO to place an order, the user is only required to enter the quantity, and the system will take the latest price of the opponent at the moment receiving this order (if the user is a buyer, the BBO price is the sell_one price; if the user is a seller, the BBO price is the buy_one price) to place an order.
As your example:
price (USD), quantity (contracts)
1702USD, 10(contracts(sell_two price)
1701USD, 5contracts (sell_one price)
When You send a BBO order to Huobi to open 6 LONG contracts. The BBO Entrusted price is the sell_one price (1701USD), the system will create an order for the buy of 6 contracts at a price of 1701USD.
However, I just read the tooltip text for the "post only" checkbox option available under limit orders, which contrarily to the documentation asserts that market execution is possible:
Post-only orders will not be immediately executed in the market, thus ensuring the trader remains a maker. If the order is immediately matched with an existing order in the market, the post-only order will be cancelled