What is KuCoin's post-only order model?

Understanding KuCoin's Post-Only Order Mechanism

1. KuCoin’s post-only order model is designed to ensure that traders only add liquidity to the market. When a user selects the post-only option while placing an order, the system guarantees that the order will not execute immediately against existing orders on the order book. If the order would otherwise match with a current bid or ask, it gets rejected instead of being processed as a taker.

2. This mechanism benefits traders who aim to receive fee rebates for providing liquidity. On KuCoin, makers—those who place limit orders that don’t immediately fill—are often rewarded with lower or even negative fees, meaning they get paid to place orders. In contrast, takers, who remove liquidity by matching with existing orders, pay higher fees. The post-only feature ensures users remain in the maker category.

3. For high-frequency traders and market makers, this model offers greater control over trading costs. By preventing accidental taker executions, especially during fast-moving markets, traders can maintain consistent strategies without unexpected fee liabilities. It acts as a safeguard against slippage caused by aggressive pricing.

4. The post-only function applies exclusively to limit orders. Market orders cannot be set as post-only because their nature is to execute immediately at the best available price, which inherently removes liquidity. Therefore, only limit orders with specified prices can utilize this feature.

5. Users must carefully set their price parameters when using post-only. If the limit price falls within the existing spread—meaning it crosses the current best bid or ask—the order will be canceled automatically rather than becoming a taker. Traders need to monitor the order book closely to position their orders just outside the spread to ensure acceptance.

Advantages of Using Post-Only on KuCoin

1. One primary advantage is cost efficiency. Since post-only orders qualify as maker orders, traders benefit from reduced trading fees. Over time, especially for active traders, these savings accumulate significantly, improving overall profitability.

2. Enhanced strategy execution is another benefit. Algorithmic traders and arbitrageurs rely on precise order placement. The post-only setting prevents unintended executions that could disrupt complex multi-leg strategies or cause imbalances in portfolio allocation.

3. Risk mitigation plays a crucial role. Fast price movements can trigger immediate fills if orders are too close to the mid-price. With post-only enabled, such premature executions are avoided, giving traders more control over entry and exit points.

4. Transparency in order behavior increases predictability. Traders know their orders won’t sneak into the market as takers due to minor mispricing. This clarity supports better backtesting and performance analysis since actual execution aligns closely with intended logic.

5. Exchange stability improves indirectly. Encouraging liquidity provision helps deepen the order book, leading to tighter spreads and smoother price discovery. A robust pool of passive orders enhances market resilience during volatile periods.

Common Scenarios and Practical Usage

1. During periods of low volatility, traders often deploy post-only limit orders near key support and resistance levels. These orders rest on the book, waiting for price movement to reach them, ensuring they contribute liquidity when trades finally occur.

2. In grid trading bots, post-only settings are frequently used to place multiple staggered buy and sell orders. Each level is intended to act as a maker, capturing small profits while adding depth to the market. Without post-only, some levels might execute instantly, turning profitable grids into loss-making sequences due to taker fees.

3. Market makers participating in KuCoin’s official programs use post-only extensively. They commit to maintaining quotes within defined spreads and volumes. The post-only mode ensures compliance with program rules that require sustained liquidity contribution without crossing into taker territory.

4. Scalpers operating on tight margins apply post-only to avoid fee erosion. Even a small number of unintended taker trades can negate gains from dozens of successful maker trades. Enabling post-only protects their edge by enforcing strict order placement discipline.

5. Traders placing iceberg or hidden orders sometimes combine them with post-only logic. Although KuCoin may not support true hidden orders across all pairs, using post-only alongside smaller visible portions allows strategic positioning without revealing full intent or triggering adverse price reactions.

Post-only orders prevent immediate execution, ensuring users act as liquidity providers and benefit from lower fees.

Frequently Asked Questions

What happens if my post-only order would cross the spread?It gets rejected automatically. KuCoin cancels the order instead of allowing it to execute as a taker, preserving its status as a potential maker order.

Can I use post-only with stop-limit orders?Yes, but only the limit portion after the stop is triggered. Once the stop condition is met, the resulting limit order can carry the post-only designation, provided it doesn’t immediately match.

Does KuCoin charge any additional fees for using post-only?No extra fees are applied. The main effect is eligibility for maker rebates. Using post-only itself is free and simply enforces order type classification.

Why did my post-only order disappear without filling?This usually means it was placed inside the bid-ask spread and thus canceled. Check the prevailing market prices; your order likely crossed into taker territory and was invalidated by the system.