Post-Only Limit Order
The Formal Definition
A conditional limit order that guarantees the order will only be placed on an exchange's public order book as resting passive liquidity (earning a maker rebate), automatically canceling the order if it would execute immediately against existing resting liquidity (which would incur a taker fee).
Execution Rule: If Limit Price would Cross NBBO (Execute Immediately as Taker) → Auto-Cancel Order | If Limit Price Rests on Book → Post to Level 2 as Maker
Cole Barrett's Reality Check
The Unvarnished Bottom Line"A post-only order is your guarantee that you will never pay an exchange liquidity-taker fee. You want to provide liquidity to the book and collect a rebate, not cross the spread and pay a penalty. If you place a buy limit order and the market moves fast, accidentally crossing the spread, a post-only order immediately cancels itself instead of letting the exchange charge you a taker fee."
Interactive Simulator: Test the Math
Real-World Example: Scenario Breakdown
Examining the real numbers for: Placing an order to buy 10,000 shares on an exchange using an inverted Maker-Taker pricing schedule (Maker Rebate: +$0.0020 / Taker Fee: -$0.0030)
| Execution Metric | Algorithmic Post-Only Order Router | Standard Unrestricted Limit Order |
|---|---|---|
| Fee / Rate | Pass-through exchange tier | Pass-through exchange tier |
| Spread / Buffer | Quoted NBBO: $50.00 Bid / $50.02 Ask; submitted Post-Only Buy Limit at $50.01 | Submitted standard Buy Limit at $50.02 right as ask flashed down to $50.02 |
| Execution / Status | Rested on book; filled when incoming seller hit the bid | Executed immediately against resting ask liquidity as a 'liquidity taker' |
| Total Cost / Result | Monetized passive order book placement | Incurred unexpected liquidity-taking fee drag |
How Brokers Weaponize This Term
Retail brokerages omit post-only order options on their interfaces, pocketing exchange maker rebates on customer limit orders while billing clients flat commission schedules.
Broker Evaluation Matrix
Cole Approves
Interactive Brokers: Trader Workstation (TWS) supports native Post-Only order attributes across lit exchanges, passing maker rebates directly through to IBKR Pro clients.
Read Audit →Cole Flags / Avoids
Basic Mobile Desks: Omits post-only controls and maker-taker fee transparency, keeping all exchange rebates for the brokerage.
View Trap Details →Frequently Asked Questions
Why do exchanges pay maker rebates?
Exchanges compete with each other for order flow; paying rebates to traders who post resting limit orders attracts order-book depth and narrows spreads.
What happens to a post-only order if the limit price matches the current best offer?
Because filling against the current best offer would execute immediately as a liquidity-taking trade, the post-only order is automatically canceled or adjusted down by one tick.