Coinbase vs Coinbase Pro Question

[o_e_l_e_o]

But are you saying if you put the amount to sell as 50k... when the current price to sell is around 55k... it would be bought off immediately?

If there are enough buy orders at or above the price of $50k, then yes, your sell order at $50k would be filled immediately. But it would be matched against the highest buy orders first and then work down until your entire order had been filled.

I mean... so if someone accidentally puts down they want to sell 5 btc right now on coinbase pro and accidentally put the sell price at 500 dollars... what would happen?

Right now on Coinbase Pro, the price is at $60,950, and there are approximately 5 BTC of buy orders between the prices of $60,900 and $60,950. If you placed a sell order for 5 BTC and $500, you are saying "I will sell at any price above $500." Coinbase Pro would match you against the highest buy orders available, so you would sell your 5 BTC at prices between $60,900 and $60,950.


Lets consider the following example for simplicity. The current bitcoin price is $60,000. There are exactly 1 BTC of buy orders at every $100 increment. So at $59,900 there is someone waiting to buy 1 BTC. At $59,800 there is someone waiting to buy 1 BTC. At $59,700 there is someone waiting to buy 1 BTC. And so on.

You come along and place a limit sell order for 10 BTC at $6000 instead of the $60,000 you meant to enter. You will match against the highest buy order, which is for 1 BTC at $59,900, and so you will sell 1 BTC to this person. You will then match against the next highest buy order, which is for 1 BTC at $59,800, and will sell 1 BTC to this person. You will then match against the next highest buy order, which is for 1 BTC at $59,700. And so on. Your entire 10 BTC will be sold for prices between $59,000 and $59,900. The current price on Coinbase Pro will drop from $60,000 to $59,000. You will have made a loss compared to selling 10 BTC at $60,000 as you intended, but it won't be the catastrophic loss of selling 10 BTC at $6000 because there were plenty of buy orders far above this price which you matched against.

If you did this on a much smaller exchange with poor liquidity, then your 10 BTC may indeed be enough to match against all the buy orders down to very low levels and you would end up with significant losses.

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[PrimeNumber7]

I mean... so if someone accidentally puts down they want to sell 5 btc right now on coinbase pro and accidentally put the sell price at 500 dollars... what would happen?  Someone or the bots would immediately see this error and buy it immediately and profit?  But if its an obvious error, there is no protection for someone who makes a mistake with this?

If you place a limit order to sell your coin at a price below the best bid price, your order will be treated similar to a "market" order and will be matched against existing buy orders that are priced at or above your limit price, starting with the orders buying coin at the highest price.

[suchmoon]

If there are current buy orders at $56,000, and you place a sell order at $55,997, then your order will be filled immediately provided there is enough liquidity.

I believe the default setting on Coinbase Pro for limit orders is "post only", i.e. one would get an error if they try to submit a limit order that would get filled immediately.

[o_e_l_e_o]

-snip-

Thanks for the clarification. I don't have a Coinbase account so couldn't verify for myself which out of "post only" and "allow taker" was the default, or if you had to select one manually each time.

For clarification - "Post only" will reject your entire order if any of would be filled immediately. This is usually for people who want to make sure they pay maker fees rather than taker fees. If you set your limit order below the current price, meaning some of it would immediately be filled, then your entire order will be rejected as per suchmoon's image.

"Allow taker" on the other hand will allow your order to be executed regardless. Even if some or all of it would be filled immediately, and therefore be subjected to taker fees, it will still go ahead, hence the name "allow taker". Any part of it which is not filled immediately would then be posted to the order books to await someone else filling it and would pay maker fees.

So in the example above where the price is $60,000 and you are trying to place a limit sell order at $50,000, if you select "post only" your order will be rejected and if you select "allow taker" then it will follow the course I described above, of being matched against the highest value buy orders until either your entire order is filled or the price falls below $50,000.

[suchmoon]

Just in case it's not the default - for all I know I set it years ago and forgot - go into Advanced settings and set it. Highly recommended for people with larger than average fingers.

[jerry0]

So right now can you use an example with btc being around 55000?  Let say one wants to sell 0.l btc at around the price shown on coinbase/coinbase pro.  You want to sell it pretty quickly right now.. thus u dont want to wait it to go up to 55500 or risk it going down lower.  Let say right now you want to sell it on coinbase pro.


How much would you get for selling 0.l btc right now on coinbase pro compared to coinbase right?  Again, you want to just sell it immediately to a seller now that is offering the highest price. 


Also when you do this, its not possible to sell it to someone offering a lower price right?  Imagine one person wanting to buy say l btc at 55000.  The next person want to buy 0.7 btc at 54900 etc.  So when you sell the entire 0.l btc... it will always be from the highest bidder right?  Again i dont want to be like okay i want it to automatically sell once its a certain price like 55000 or 55500.  Its more like okay the price now on coinbase/coinbase pro seem to be around 55000.  I want to immediately sell it for fiat.  So wouldn't selling on coinbase pro still be very quick though?  Like imagine you want to sell that 0.l btc and say by the time you log into your account and go to exchange, you see its now 54800 but you dont care... you want to sell that 0.l btc now for fiat.  So that should be very quick right since you only have 0.l btc to sell?

[PrimeNumber7]

So right now can you use an example with btc being around 55000?  Let say one wants to sell 0.l btc at around the price shown on coinbase/coinbase pro.  You want to sell it pretty quickly right now.. thus u dont want to wait it to go up to 55500 or risk it going down lower.  Let say right now you want to sell it on coinbase pro.


How much would you get for selling 0.l btc right now on coinbase pro compared to coinbase right?  Again, you want to just sell it immediately to a seller now that is offering the highest price. 


Also when you do this, its not possible to sell it to someone offering a lower price right?  Imagine one person wanting to buy say l btc at 55000.  The next person want to buy 0.7 btc at 54900 etc.  So when you sell the entire 0.l btc... it will always be from the highest bidder right?  Again i dont want to be like okay i want it to automatically sell once its a certain price like 55000 or 55500.  Its more like okay the price now on coinbase/coinbase pro seem to be around 55000.  I want to immediately sell it for fiat.  So wouldn't selling on coinbase pro still be very quick though?  Like imagine you want to sell that 0.l btc and say by the time you log into your account and go to exchange, you see its now 54800 but you dont care... you want to sell that 0.l btc now for fiat.  So that should be very quick right since you only have 0.l btc to sell?

It is possible to place a "market" order. For an amount as small of 0.1 BTC on an exchange such as coinbase pro, a market order is probably your best solution.

If you were to enter into a market order to sell 0.1 BTC, or if you were to enter into a limit order at a price at or below 55000 for 0.1 BTC,  in your example, your order would execute at 55000, and you would receive 5500 less trading fees charged based on your previous trading activity. If you were to sell this same 0.1 BTC on the coinbase exchange, you would receive 5500 less the fees and commissions charged by the coinbase platform. In both cases, your order would be matched against the existing order.

[o_e_l_e_o]

PrimeNumber7 is correct. Just place a market order. It will fill instantly at whatever the current price is.

On Coinbase Pro, you are paying a fee of 0.5% for a market order unless you have traded more than $10k USD in the last 30 days. So selling 0.1 BTC at $55,000 would get you 0.1*55000*0.995 = $5472.50.
On Coinbase, they charge a spread of around 0.5% (but this can vary), and they also hit you with a flat fee for low amounts or a variable fee for higher amounts. The best variable fee you can get, depending on your method of fiat payment, its 1.49%. So if you were to sell 0.1 BTC at $55,000, you would get 0.1*55000*0.995*0.9851 = $5390.96.

So best case scenario you are losing around $80 by using Coinbase over Coinbase Pro.

So when you sell the entire 0.l btc... it will always be from the highest bidder right?

Correct. You cannot jump over higher bidders and sell to lower ones.