A post-only order is an instruction intended to place an order on the book as liquidity to be taken by later orders, rather than immediately remove existing liquidity. It is commonly attached to a limit order. A strategy uses it to control how it enters the market, but must accept rejection, adjustment or non-execution under the venue’s rules.
The price limit and the posting condition answer different questions. The limit sets the worst authorised execution price. Post-only controls whether, and how, the order can enter as a liquidity provider. A buy limit can be marketable even though it has a price cap.
The same price cap can produce a fill or a rejection
Consider a fictional venue with a reject-if-marketable post-only policy: if any part of the incoming order would immediately take liquidity, reject the entire order without a fill. There is no repricing in this example.
At arrival, the order book has a best bid of USD 98 per share and a best ask of USD 101 for 100 shares. Compare three separate requests to buy 100 shares, each against that same initial book. Assume one eligible pool, whole shares, a frozen arrival book, no hidden liquidity, no routing, no self-trade restrictions and no fees. All other acceptance checks pass; accepted unfilled quantity may rest.
| Request | Result under the fictional rule |
|---|---|
| Ordinary buy limit at 101 | Buys 100 shares at 101; pays USD 10,100 before fees |
| Post-only buy limit at 101 | Would take the ask; rejected with 0 shares filled and 0 shares live |
| Post-only buy limit at 99 | Does not reach the ask; accepted with 0 shares filled and 100 shares resting at 99 |
The ordinary order and the rejected order have identical price limits. The difference is the posting instruction. The rejected order has no resting remainder: its unexecuted target is not an executable order on the book.
Original fictional single-pool comparison. Prices are USD per share; quantities are whole shares. Rejection, resting and later matching follow the stated assumptions, not a universal venue rule.
In this simplified book, a buy with limit would take liquidity when , where is the best ask. A sell would take when , where is the best bid. Equality counts: buying at the ask is an immediate match, not a passive bid merely because it is a limit order. These tests assume the opposite quote is eligible to trade with the order.
Acceptance and execution are separate events
A resting order is available for a possible later match. It has not yet acquired a position. If a later incoming sell reaches the accepted bid at 99, with no earlier-priority quantity ahead, and allocates 40 shares to it, the buyer then owns 40 shares and has 60 shares still live. If no matching sell arrives, the fill remains zero. Queue priority, cancellation, expiry and subsequent order flow determine what happens next.
Use the quote state at venue processing, not merely the quote last seen when submitting. An apparently passive order can become marketable while in transit. In the fictional rejection model that changes acceptance, rather than authorising a surprise taker fill. A backtest needs both the arrival-state test and a separate model for later fills; treating every accepted order as executed overstates completion.
Market, Limit and Conditional Orders develops these distinctions through order acknowledgements, partial fills and cancellation races. The public page is a preview; the full lesson requires membership.
Read the venue’s rule before relying on the label
The fictional rejection policy resembles the explicit
post_only behaviour in the Coinbase Exchange order API: an order that would take liquidity in any part is rejected without execution. That statement applies to the documented Exchange interface, not every Coinbase product.Other rulebooks use the label differently. Nasdaq Rule 4702(b)(4) provides for price adjustments, participant cancellation choices and specified immediate-execution exceptions based on price improvement. A post-only label therefore does not establish one universal rejection algorithm. Session, order attributes and interface choices can matter. These official pages were checked on 27 October 2026.
Nor does posting guarantee a maker rebate. Under Coinbase Exchange’s published fee schedule, for example, standard maker pricing can include a positive fee. Applicable product, programme and account pricing must be checked separately. More fundamentally, favourable fees cannot eliminate adverse selection: a resting bid may fill precisely when the market is moving down. Evaluate fills, misses and rejected requests together when judging the execution policy.
Sources
- Coinbase Exchange, Create a new order — Post Only: interface-specific rejection and zero-execution semantics.
- Nasdaq, Equity 4, Rule 4702(b)(4), Post-Only Orders: adjustment, cancellation and execution qualifications.
- Coinbase Exchange, Exchange fees: maker classification and applicable pricing. Primary pages checked 27 October 2026.
- Rishi K. Narang, Inside the Black Box: A Simple Guide to Quantitative and High-Frequency Trading, 2nd edition, Wiley, 2013, Chapter 7, “Aggressive versus Passive,” pp. 121–124, and “Other Order Types,” pp. 124–125: passive execution uncertainty, allocation and venue-dependent modifiers.