Take Profit Market

This order type is a variant of a take profit order, wherein an asset is divested as a market order upon reaching a predefined price trigger.

How it worksTake profit market order explained

This is a variant of a take profit order, which is reliant on being attached to a buy order for the acquisition of a given asset, it then assigns a sales price trigger to those assets that will initiate a market order to begin selling at market prices.

The primary issue with this order type is that it can be subject to slippage, meaning that as the order attempts to sell, there may be a difference between the original trigger price and the average execution price. An additional drawback of the take profit market order is that if it is triggered amidst a volatility spike, it may result in significantly fewer profits than intended.

Illustrative AXO price: 12.5 ADA
Use case

How it is used

Robin purchased $1,000 worth of AXO tokens at $10 each with a take profit market order. He is a diligent trader, so he hasn’t sold in the upwards trajectory, and instead waits for his trigger price to activate. Once it hits $15, his trigger price is activated and a market order is deployed, selling the initial tokens he acquired. Through this, Robin will have locked in a profit of roughly 50%, or as close as the market conditions, allow irrespective of whether the price might go up or down from that level, he is guaranteed fast execution due to the market order.

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