How to Place Orders When Crypto Options Liquidity Is Low
When liquidity is thin, the core principle is simple: don't use market orders, use limit orders—and know how to read the order book and place your bids properly. If liquidity is truly terrible, just walk away; don't force the trade.
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Why should you never use a market order?
Low liquidity means the gap between buy and sell orders is wide. If you use a market order in that environment, the system will immediately consume the most expensive asks (or the cheapest bids) on the order book, causing your fill price to deviate drastically from what you expected—slippage will be severe.
Years ago, a similar case occurred in commodity futures options. During a silver crash, someone rushed to buy put options at the market. A contract that should have cost around 50 bucks ended up being filled at 777—an instant wipeout. In the crypto options market, where liquidity can be even worse than in traditional commodity options, this "getting phished" risk is even higher.
How to actually place your order?
Step 1: Check the order book and confirm liquidity
On the trading page, open the order book for the specific options contract you want to buy. Focus on two things:
Bid-Ask spread: How wide is the gap between the best bid and the best ask? The narrower the spread, the safer you are.
Order depth: How many contracts are resting on the best ask? If there are only a handful of lots, the depth is insufficient.
Completion standard: You can clearly see the current best ask price and how many contracts are queued at that level.
Step 2: Place a limit order
When liquidity is poor, you must set the price you are willing to accept yourself, rather than leaving it to the market.
On the order entry panel, select "Limit Order".
Enter a price. This can be slightly below the best ask, or you can place it near the best bid.
Enter the quantity you want to buy.
Submit the order.
Completion standard: After submitting, the order status shows as "Open" and is waiting to be filled.
Step 3: Split your order (optional)
If you need to buy a larger amount, break it into several smaller orders and place them at different price levels. Dumping everything in one go not only drives up your cost but also risks the order sitting unfilled for ages.
What if your limit order never gets filled?
Orders sitting unfilled for a long time are normal for illiquid contracts.
Gradually increase your price: Slowly adjust your limit price closer to the best ask and see if you can attract a counterparty.
Switch contracts: If the specific strike or expiry has zero liquidity, look at at-the-money options or the front-month series—they usually have better liquidity.
Walk away: Some deep out-of-the-money or deep in-the-money options have almost no liquidity; any fill would be a rip-off. The fact that your order isn't filling is the market protecting you—don't force the trade.
One thing you must avoid
Never use "One-Click Close" or "Quick Close" functions. In options trading software, these features often fire orders at the exchange's extreme price limits just to guarantee an immediate fill. If liquidity is thin, a position that was only down $500 might turn into a $5,000 loss by the time you close it.
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Confirming it's done
After placing your order, check your Open Orders to see your limit order. If the status later changes to "Filled" and the average fill price in your Trade History is very close to the price you set, your execution was successful. If you see that your order was hit by severe slippage, it means the liquidity is too poor for market or aggressive tactics—so next time, stick to limit orders and play it safe.
