Take Profit Limit

This order type is a variant of a take profit order, wherein an asset is divested as a limit order upon reaching a predefined profit margin.

How it worksTake profit limit order explained

A take profit limit order is conditional on being joined to a buy order for the original purchase, it works by putting up an asset at a minimum sale price. It does not concern itself with any action beyond never selling its assets for less than the take profit price, and trying to maximize its execution price if possible.

Just like a regular limit order, if during the execution process the order is partially filled due to a lack of liquidity at the take profit price range, the order will remain active until more liquidity enters the market or it is canceled. One of the main drawbacks of a take profit limit order is that it does not adjust based on sudden movements, and the price can shift below the selling price.

Illustrative AXO price: 12.5 ADA
Use case

How it is used

Stephan placed a take profit limit order buying AXO tokens at $10 each. In the weeks that followed, the price rose and the AXO token is reaching the trigger point Stephan set of $15 (50% profit), wherein his take profit limit order will begin selling. At $15, the take profit limit order works as a minimum sell price for the transaction, which was decided when the order was first deployed.

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