A Staggered Order is an algorithmic order commonly used to execute large orders without causing significant market fluctuations or influencing the behavior of other market participants. It breaks a large order into multiple sub-orders within a specific price range, with each sub-order placed as an independent limit order at incrementally increasing or decreasing prices.
For staggered buy orders, a decline in the market price will trigger lower-priced orders sequentially. Conversely, for staggered sell orders, a rise in the market price will trigger higher-priced orders. Staggered Orders can be used to achieve a better average entry or exit price, or to control the distribution and adjustment of orders within a specific price range.
The main advantages of Staggered Orders are as follows:
1. Lower Slippage: Staggered Orders break large orders into multiple smaller sub-orders, helping avoid price fluctuations and slippage caused by sudden, significant market movements.
2. Greater Execution Control: With Staggered Orders, you can adjust order sizes and timing based on market conditions, take advantage of short-term price fluctuations, and maintain greater control over execution.
3. More Entry Points: Staggered Orders allow you to enter the market at multiple price levels across a broad price range, helping optimize trading outcomes and capture market trends more precisely.
How Do Staggered Orders Work?
For Staggered Orders, Zoomex provides four order size and price distribution modes: Arithmetic/Equal, Increasing, Decreasing, and Custom.
1. Arithmetic/Equal
The Arithmetic/Equal mode evenly distributes the order size and price based on the specified number of orders. Each sub-order has the same size, and the order amount is evenly distributed across the price range. If you expect the market price to fluctuate within a certain range but have no specific directional preference, you can choose the Arithmetic/Equal mode.
2. Increasing
Under the Increasing distribution mode, the size and price of sub-orders are distributed in an increasing pattern. The entry price or order quantity of each sub-order increases by a specified factor compared with the previous order.
3. Decreasing
Under the Decreasing distribution mode, the size and price of sub-orders are distributed in a decreasing pattern. The entry price or order quantity of each sub-order decreases by a specified factor compared with the previous order.
4. Custom
You can customize the distribution mode based on your investment strategy. Please note the following:
*An order can only be split into 2–50 sub-orders. The entry price of each sub-order must fall within the specified price range.
*The size of each sub-order must not exceed the maximum order size. The minimum allocation ratio for a single sub-order must not be less than 0.01%.
*The maximum allocation ratio for a single sub-order must not exceed 100%.
*The sum of the allocation ratios of all sub-orders must equal 100%.
Example
Take a USDT-margined perpetual contract as an example.
Suppose the current market price of ETHUSDT is 1,000 USDT, and Lily wants to short 100 ETH. Instead of placing a single order, Lily chooses a Staggered Order and sets the following parameters:
Total Order Size: 100 ETH
Number of Orders: 10
Order Distribution Mode: Arithmetic/Equal
Sub-order Size: 10 ETH
Price Range: 1,200–1,470 USDT
Price Difference: 30 USDT
Average Sell Price: (1,200 + 1,230 + ... + 1,470) / 10 = 1,335 USDT
After the order is submitted, 10 limit orders will be placed in the order book. The first sub-order has a size of 10 ETH and an order price of 1,200 USDT. The subsequent orders are placed at progressively higher prices: 1,230 USDT, 1,260 USDT, 1,290 USDT, and so on, until the market price exceeds 1,470 USDT and the entire order is filled, with an average execution price of 1,335 USDT.
Please note that if the current market price is more favorable than the sub-order price, the order will be executed immediately at the best available market price.