What Are Scaled Orders and How Do They Work

1. What is a scaled order?

A scaled order automatically generates multiple limit orders within a specified price range. This order type is beneficial for managing large order quantities. It splits the order amount into several suborders and places them separately without significantly impacting the market. Scaled orders are often used to achieve a better average price when starting or closing a position.

2. When to use a scaled order?

Scaled orders benefit traders who want to avoid revealing their total order volume to the market, which is often a concern for those dealing with significant quantities of a particular asset. Revealing large orders can influence other market participants' behavior and, in turn, the asset's price, which might be detrimental to the trader's position.

3. How to submit a scaled order?

1. Log into your Binance account and visit the [COIN-M] or [USDⓈ-M] Futures trading interface.

2. Select the contract you wish to trade.

3. Choose [Scaled Order] from the dropdown menu and customize the order parameters:

• Lower and Upper Price;
• Size;
• Order Count;
• Size Distribution.

Choose whether to buy or sell and click [Preview].

4. You’ll see the limit suborders created based on your input. If you are satisfied with the suborders, click [Submit]. The system will batch all the suborders and send them to the matching engine.

4. Can I control the distribution of a scaled order?

You can set the distribution of your scaled order to control the share of the total amount each order receives. There are four distribution types available:

Flat: This type of distribution is the most straightforward. Each order within your total amount receives the same size. The amount distribution is uniform across all price points. You can use [Flat] when you expect the price to fluctuate within the range but have no specific bias towards it moving upwards or downwards.

Ascending: The order size systematically grows as the price escalates. The last order is characterized by the highest price and largest quantity, resulting in more of the asset being traded at a higher price. It's commonly employed to distribute sell orders and elevate the average selling price of the order.

Descending: The order size contracts as the price rises, and the order with the highest price will have the smallest quantity. In this case, a greater portion of the asset is traded at lower prices. It's typically used to spread out buy orders and lower the average buy price.

Random: As suggested by its name, this distribution type randomly allocates the size of each order at every price point within a defined range. With a random distribution, you'll need to enter the variance % (up to 10%). If you opt for a variance of 10%, it means the order sizes will be randomly distributed across a range with a 10% variation.