Post-only order

A limit order that is cancelled rather than executed if it would immediately match a resting order. It guarantees the order either rests on the book as a maker or does not execute at all, so it can never pay a taker fee.

Definition

A post-only order is a limit order with one extra condition attached: it must add liquidity to the book. If, at the moment it arrives, it would cross the spread and match an existing order, the exchange cancels it instead of filling it. Some venues label this ALO, for “add liquidity only”.

Why traders use it

The maker fee is normally lower than the taker fee, and on some venues makers are rebated rather than charged. For a strategy that places many orders, the difference between paying taker and paying maker compounds into a meaningful part of the result.

A plain limit order does not protect you here. Price it slightly wrong, and it crosses the spread, fills instantly and is billed as a taker. Post-only removes that possibility by construction.

The cost of the guarantee

You trade certainty about the fee for certainty about execution. In a moving market a post-only order placed at what was the right price a moment ago simply disappears, and you are left unfilled, with no position and no error to react to unless you are watching for the rejection.

That makes post-only a poor choice for anything urgent, and specifically a poor choice for exiting a position that is going against you.

Where you will run into it

As a checkbox on the limit order ticket of order-book perpetual DEXs, and as a default setting in market-making bots and API strategies, where paying taker fees on every fill would erode the edge the strategy depends on.