Many have asked me the following:
When an order price is said to deviate by more than 5% from the last market price, it means that the price at which the order is executed is significantly different from the most recent price at which the asset has been traded. This can happen for several reasons:
1. Market volatility: In highly volatile markets, prices can change rapidly, which can cause the execution price of an order to deviate significantly from the last market price.
2. Liquidity: If there is little liquidity in the market, there may not be enough buy or sell orders close to the last market price, which can lead to a larger deviation.
3. Order Type: Market orders are executed at the best price available at the time, which may result in a deviation if there are not enough orders at close prices.
This deviation can be problematic, especially if you are trading high volumes or in highly volatile markets, as it can significantly affect the outcome of your trade.
Would you like to know more about how to manage these types of risks in your operations?
