The traditional finance industry is always on the lookout for ways to automate trading in order to increase liquidity and make it easier for market participants to realize their trades. While crypto competes with TradFi in more ways than one, replicating certain trading tools and strategies is not unheard of either.
Conditional listing, a variation of one-cancels-the-other (OCO) order, is a good example. At the most basic level, it means that two or more conflicting orders are submitted, and as soon as conditions are met to execute one of them, the rest gets automatically canceled.
In TradFi, this often translates to two simultaneous selling orders at different prices. Popular with highly volatile assets, the setup triggers a sale at either an alarmingly low or satisfactorily high price, otherwise known as stop-limit and limit orders.
For example, if an asset's current market price is $100 and the trader hopes to sell their holdings at $150, they can place a sell limit order that gets executed as soon as the asset hits that limit price. At the same time, however, the trader can place a parallel order to sell everything if the price drops to $75. That way, if things go south, the trader can exit their position with minor losses. Once conditions are met for one of the orders and it gets realized, the other is automatically canceled.
Now, how can it help crypto traders?
Conditional listing in NFTs
Conditional listing made headlines as LooksRare, a major competitor to OpenSea announced it was enabling it for holders of multiple NFTs. If a holder of two NFTs wishes to sell one of them, they can put both up for sale. If one of the NFTs is sold, the other immediately becomes unavailable.
For example, if a savvy trader manages to scoop up two Goblins and wants to sell one, because Goblins have just rallied, listing both by means of conditional listing can speed up the process. That way, the holder ensures that one Goblin stays in their wallet in case it rises in value even more over the next days, weeks, or months.
The trick works only for NFTs listed on LooksRare, and not any other marketplace. NFT pairs listed on other platforms could still both get sold. That said, NFT aggregators like Gem or Genie do not affect the process, as long as the sale takes place on LooksRare. The NFTs can also come from different collections, and be listed at different prices.
For now, LooksRare only offers conditional listing for two items, but the marketplace already said it was planning to extend that limit once it becomes evident that the technology runs smooth and is easy to use. The move is part of LooksRare’s strategy to chip away at OpenSea, still the largest NFT marketplace out there.
One-cancels-the-other on crypto exchanges
The biggest crypto exchange in the world by trading volume, Binance, offers one-cancels-the-other (OCO) orders that allow experienced traders to combine a limit order with a stop-limit order. Binance OCO orders can be placed as a pair of buying or selling orders, with a handy reminder on what OCO orders are about showing up when the user clicks on the “i” mark.
Crypto.com, another major crypto exchange, offers a similar automation solution with its trading account. On both platforms, manual cancelation of any of the two orders triggers a cancellation of the OCO order.
While Binance and Crypto.com advertise their one-cancels-the-other orders as a tool for taking profits and managing risks for retail investor accounts, Bybit expands its use cases. The exchange’s educational materials suggest that Bybit’s OCOs can help traders who hesitate between two different cryptocurrencies make that decision by automating the process of tracking the coins’ performance.
OCOs can also allow traders to seize price breaks when they expect the assets they follow to be influenced by a new trend.
A new decentralized binary crypto betting platform, Logium, is also offering something akin to conditional listing. It allows users to issue multiple bets on the future prices of a given coin, even if they haven’t deposited enough collateral to back them all.
As soon as enough bets are taken by other users and the entire sum deposited as collateral is used up, all others get canceled. The solution, although not risk-free, encourages traders to create more bets, boosting the chances that some will be taken.
Staying cool
Trading platforms view conditional listing tools and one-cancels-the-other orders as ways to achieve better liquidity, expand traders’ capabilities, and execute more trades. Not all major crypto exchanges have them. Conditional close offered by Kraken, which activates an order once another order gets executed, is a good example.
But traders increasingly see conditional listing and OCOs as an important part of the basic crypto trading toolkit, suggesting that more exchanges could add those functionalities in the near future. They serve as a powerful risk management layer and help control the emotions that inevitably impact trading activities realized on the spot.
More importantly, they allow retail investors to construct a strategy, then set it up on an exchange or NFT marketplace and go do something else. For those who have trouble balancing work with personal life, an one-cancels-the-other order or conditional listing could help take kids out for a sundae, or spend an afternoon with that book that’s sat on the bedside table for far too long, or take a scenic hike.
Note that neither involves a monitor.
