What is a limit order?
A limit order allows you to take more control over the price at which you purchase a contract by explicitly setting the maximum price you’re willing to pay for a contract. If someone is willing to take that price or better, your order is filled. Limit orders give you the potential to purchase a contract at a price that is different from what is listed in the Quick Order panel.
When to use limit orders
If you feel the current price of a contract is too high, you can submit a limit order at a lower price. If the market reaches that price at a later date, your order will be filled and a trade will take place.
Another reason to use a limit order is if you want to purchase more contracts at a certain price than is currently available on the order book. For example, if the current lowest price on the order book is 31c and there are 250 contracts available to purchase, but you want 1000 contracts and aren’t willing to pay 32c, you can place a limit order. The first 250 contracts will be purchased immediately, and the remaining 750 contracts will be added to the order book. Someone may agree to take the other side at a later date, at which point the trade will be executed.
Perhaps the biggest reason to use a limit order is to avoid paying trading fees. If you use alimit order to create a resting order and get filled by another trader, the other trader has to pay fees to the exchange, but you get your shares at no extra cost. This can make a big difference in the long run.
For example, if you want to buy 1000 contracts at 80c each. Being the taker on that trade would cost you $800 for the position and about $13 in fees on top of that, or approximately one Chipotle burrito with double meat. Instead, remembering that patience is a virtue, make a limit order at 79c for 1000 shares. If you get filled, you only pay $790 for the same position and you pay zero in fees to Kalshi, which is a $23 difference from being a taker at 80c. If you’re trading often and in significant size, savings can really add up. This is Kalshi’s way of rewarding and encouraging liquidity in the order books. More on this in the No Fees on Maker Orders on the bottom of this article.
One thing to note: There is no guarantee that a limit order will be filled, as it will only execute if the market price reaches the specified limit price. This means that if the market does not reach the limit price, the order may remain unfilled. You can set the criteria under which those unfilled orders are canceled in the order panel (more on this in the following example).
Example
Let’s walk through the second use case listed above in more detail. Say you are purchasing an Inflation Contract - you believe inflation will be above .2% MoM, or you want to hedge the risk that inflation is higher than that amount.
You can go to the Inflation market and click the strike you are interested in…
By selecting Yes for 31c, you’ll see the order panel pop up on the right hand side. By selecting the pencil in the top right corner, you can switch to Limit Orders.
You can specify that you want to purchase 1000 contracts at 31c.
You see in the image above “Valid until market expiration” is checked. This means, any orders that go unfilled will stay on the order book until the market expires. If you prefer to have unfilled orders be canceled earlier, you can uncheck that box and select End Of Day (EOD), Immediate or Cancel (IOC), which means to cancel any orders that don’t get filled immediately, or a custom time. You can also cancel resting orders from the portfolio page.
Once you execute the order, you’ll see you have purchased 250 Yes contracts, and there are now 750 resting Yes contracts on the order book. If someone decides to purchase those at a later date, the order will be filled. It’s that easy!
If you decide you want to cancel any unfilled orders at a later date, you can do so by clicking the clock and cancelling the order.
No Fees on Maker Orders
If you buy a contract that is already on the order book, that is called a “Taker” order. All Quick Orders on Kalshi are Taker orders; any Limit Order in which you are purchasing contracts already on the order book (for example the first 250 contracts traded in the example above) would also be a Taker Order. Any order in which you are adding resting orders to the order book is called a “Maker Order” (the remaining 750 contracts added to the order book in the example above).
Taker Orders are subject to our small fees outlined in the fee schedule. At Kalshi, we charge no fees for Maker Orders.