What is Chain Order?

Chain order is a type of order frequently used in traditional financial markets. Chain order is defined as submitting another order to the market that is linked to an order when that order is triggered and executed. Chain orders, which are especially used in stock markets in traditional financial markets, are defined as all stock purchase or sale orders that are linked to the main order entered into the system to be transmitted to the stock market and have not been executed, and are defined to be transmitted to the market again depending on the condition of the complete execution of the main order.

Chain Order Example

Let's assume Bitcoin price is currently at $20,500. You want to place a buy order in case the price reaches $20,000, but since we don't know exactly when the order will execute, you would need to log in again and place a sell order after the purchase is completed. However, with a chain order, when the buy order is placed, the sell order can also be written linked to the main buy order.

For example, let's say we write a sell order at $20,400 linked to the main order if Bitcoin drops to $20,000 and the 1 BTC buy order is fully executed. After the price drops to $20,000 and the order executes, the 1 BTC you bought can be set to sell at $20,400. Thus, a sell order is automatically placed right after the purchase.

How is Chain Order Transmission Executed?

To transmit a chain order, a main order must first be determined. After determining the main order, you can link another order to the main order on the order entry screen. For chain orders to be transmitted to the market, the main order must be fully executed. After a partially executed main order, the chain is not transmitted to the market.

Multiple orders can be linked in a chain against the execution of the main order. For example, if Bitcoin price drops to $20,000 and the main order executes, you can write a sell order at $20,400 or another buy order at $19,500.

Conditions can also be added to secondary orders in chain orders. For example, after a $20,000 buy order, you can write a $20,400 sell order in chain and then write another buy order at $20,100 after this order executes. Thus, you can create a chain order by linking 3 separate orders.

In chain orders, after each trigger order is executed, the account balance must be sufficient for that order for the next order to be transmitted to the market.

Chain Order Advantages

• With chain orders, you can anticipate potential opportunities and make profits or protect your portfolio even when you're not available.
• Chain orders that execute linked to a main order become active when the main order executes, thus adapting better to market conditions and facilitating position management.
• Chain orders provide you with an advantage when you want to determine a new position after setting your position, allowing you to have advantageous positions for conditions that may occur when you're not active.

Chain Order Disadvantages

• If the main order in chain orders is not fully executed, the chain order mechanism will not work. In such a scenario, after partial purchase execution, you need to either enter a new sell order or cancel the chain order and enter a sell order.
• Corrections or modifications cannot be made for chain orders waiting in the market in a linked manner. However, when you want to make a change in the order, you can easily cancel it and enter it again.