Every digit matters! Accuracy can make a total difference, especially when it comes to trading. With the intention to maintain favorable trading conditions for everyone, we’ll change precision and minimum order size for certain currency pairs starting from April 16. As usual, we’re not doing this update out of thin air. The change is based on a thorough analysis of the market, precision and minimum order size values set by competitors, trading patterns on CEX.IO, and, of course, requests from our active traders.
Why do we make this change?
Precision is one of the factors that affect the efficiency of order books and the successful execution of orders. Let’s say, you place a buy order with the price of Bitcoin at $8,900.01 with the aim to offer the best price. Imagine if other traders start placing orders at $8,900.011, $8,900.01101, $8,900.010111, and so on. It will result in endless replacements of orders with the addition of decimal places without any sense and benefit for the market. Thus, it will put an additional and meaningless load on the platform, which can result in slowing down the execution of your order, abnormally frequent movement of the order book, useless market data updates and so on. All in all, this kind of situation is disadvantageous to all the parties. What’s more, such actions can be caused not only by willful acts but also by a simple failure in someone’s robot. Therefore, such limits serve as protection of the market and all its participants from technical issues.
If the precision is insufficient, for example, 1 cent at the price of $1, then each minimum change in the price already equals a 1% in the price increment, which is usually too much for trading. Therefore, under such circumstances, the price on the market won’t be “improving”, meaning that the buyer and the seller won’t be able to get the usual benefit resulting from the healthy competition of the market participants.
Meeting our traders’ interests and complying with the market standards
By choosing the right value for the allowed precision, we intend to meet the expectations of our traders in their will to put a certain price for their order. At the same time, we want to avoid the load on the trade engine and a higher number of canceled orders with over-precision. So, if we put the price precision at 1 (meaning 1 decimal place), it would satisfy the retail traders, but won’t meet the needs of those who practice automated trading. If we place 10 decimal places, then it would be bearable for bots only. Therefore, our update considers the interests of our current traders and complies with the market standards.
Also, by placing the limit on minimum order size, we want to free our customers from shady traders who spam with multiple orders for amounts with a price close to zero. Just like in the case of the precision value, we risk having a system overload without any benefits for the traders if we don’t agree to minimum order sizes for certain pairs.
We believe that the precision and minimum order size change for the currency pairs mentioned below will create more auspicious conditions for trading cryptocurrency on CEX.IO, and this is what we strive for.
Which pairs will be affected?
In the table, you see the final degree of precision (changed precision is marked in bold) and new minimum order size for the pairs that will come in effect as of April 16.
|Pair||Final precision (# decimal places)||New minimum order size (in the first currency of the pair)|
To prepare for this change, we kindly ask you to update your automated trading tools, robots, and apps, respectively.
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