What are the risks associated with executing market on close orders in the cryptocurrency industry?

3 answers

• jjsquaredJan 12, 2025 · 6 months ago
  Executing market on close orders in the cryptocurrency industry carries certain risks that traders should be aware of. One of the main risks is price volatility. Cryptocurrency prices can fluctuate rapidly, and executing a market order at the close of the market can result in a significantly different price than anticipated. Traders should be prepared for the possibility of slippage, where the executed price is different from the expected price. Additionally, executing market on close orders can lead to increased competition and higher trading volumes, which can further impact the execution price. It is important for traders to carefully consider these risks and have a solid risk management strategy in place to mitigate potential losses.
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• SilberspechtSep 30, 2023 · 2 years ago
  When executing market on close orders in the cryptocurrency industry, there are several risks that traders should be aware of. One such risk is the lack of liquidity during the closing period. As the market approaches its closing time, liquidity tends to decrease, which can result in wider bid-ask spreads and increased price volatility. Traders should be cautious of executing market orders during this time as it may lead to unfavorable execution prices. Another risk is the potential for market manipulation. Due to the decentralized nature of the cryptocurrency industry, there is a possibility for malicious actors to manipulate prices during the closing period. Traders should be vigilant and use reputable exchanges to minimize the risk of falling victim to such manipulation.
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• KijokDec 15, 2022 · 3 years ago
  At BYDFi, we understand the risks associated with executing market on close orders in the cryptocurrency industry. While market on close orders can offer convenience and efficiency, it is important for traders to be aware of the potential risks involved. One of the main risks is the lack of control over the execution price. When executing a market order at the close of the market, traders are essentially accepting the prevailing market price, which may not be the most favorable price. Additionally, executing market on close orders can result in increased slippage, especially during periods of high volatility. Traders should carefully consider these risks and evaluate whether market on close orders align with their trading strategies and risk tolerance.
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