Huobi derivatives & market orders

[DavideBaldini]

Huobi's futures and perpetual swaps seem to only allow entering limit orders with no option for market orders.

From the documentation page Trading Rules of Perpetual Swaps only these type of orders are listed:

• Limit order
• Trigger order
• BBO (Best Bid Offer) order
• Optimal Top N BBO Price Order
• Flash close

Which inordinately belong all to the limit class of order. The documentation doesn't afford to list market orders. This shortcoming seems to be confirmed by the trading panel itself: screenshot. Incidentally the order book consistently maintains an abnormal concentration of volume close to the spread, suggesting the intention to execute these limit orders ASAP.

The lack of market orders also inherently suggests heavy participation of Huobi in an internal dealing desk.

[JeromeTash]

Is this even possible?

How does a market size without Market orders? In every market I have seen in the past, we have Makers and Takers. Without one of the 2, the market becomes iliquid.
I think it's just the terminology used there that's a little confusing.

BBO (Best Bid Offer) order, Optimal Top N BBO Price Order and Flash close all probably fall under the market order types.

Even the limit order, when Post only is unchecked can end up getting filled as a market order

[DavideBaldini]

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/900000088923

• Hello, 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

[JeromeTash]

Basing on the replies, I am thinking it's BBO only that they are using more fancy and confusing words to a trader who is used to how direct other exchange are with market orders. The Customer service assist also doesn't seem to get enough explanation to you in regard to the execution of BBO when you asked him in the second part.

But BBO doesn't let you determine the price you want to buy or sell, just like  the Market order.

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

If it's checked, it will not immediately execute on the market , but it if the market price swings just as you are creating the order, it gets cancelled. However, if you open a limit order where post only remains unchecked, if the market swings just as you are creating your order, it will get filled at the market price

[DavideBaldini]

I was confirmed today that only limit orders can be submitted to Huobi:

• I'm sorry to disturb again.
  
  Huobi's Perpetual Swaps allow these types of order:
  
  * Limit order
  * Trigger order
  * BBO
  * Optimal Top N BBO Price Order
  * Flash close
  
  To my understanding, none of these types of order take liquidity away from the
  orderbook; instead, all of them add liquidity to the orderbook.
  
  To my understanding, Huobi offers no way to take liquidity away from the
  orderbook, except via the cumbersome procedure of setting the order's price
  across the spread, disabling the "post only" option.
  
  This seems fragile, because if the market's price changes rapidly, the order may
  accidentally become a market maker, instead of a market taker.
  
  Am I correct?
  Does Huobi offer a more robust way to send a taker order?

• Hello, nice to receive your email. You're right, if the market's price changes rapidly, the order may accidentally become a market maker, instead of a market taker.
  
  A maker transaction refers to placing a limit order which does not instantly be filled with the open orders in the order book, therefore the order will be placed in the order book and wait to be filled. A Maker order can only be finalized after a fully complete transaction. Maker trading increases the liquidity of the order book.
  
  Our matching mechanism is price first and time first, so when you place an order with Limit order, it is recommended that
  the selling order price is lower than market price or the buying order price is higher than market price. This will improve the  immediate transaction probability. Please note that whether the order can be successfully filled or not depends on the market conditions.  If the order can be matched immediately, this order is taker transaction.
  
  
  If there are any other questions, please feel free to reply to us, or mail [email protected], we will reply to you as soon as possible.
  
  Best Regards,
  
  Huobi Futures Customer Service Center

[Bitcoin_Arena]

I was confirmed today that only limit orders can be submitted to Huobi:

I have never traded derivatives in Huobi, but I do use their spot market sometimes and over there, everything is normal with an option of market order.

I still wonder why they try to make their Derivatives market different from the rest. If I was in your position. I would just look for alternatives, which are so many like;
Kucoin
Okex
Bybit
FTX
Phemex

[DavideBaldini]

Yes their spot works normally. I insisted on Huobi because I already "sunk cost" there by passing KYC, required to even access the derivatives trading panel, and by reading their docs.