How to use TWAP orders on Bybit

Placing a large order all at once can move the market against you. Prices may jump, liquidity can thin out and execution often ends up worse than expected. This is especially common in volatile or lower-liquidity markets, because when you trade matters just as much as what price you get.

A TWAP algorithm helps divide a large trade into smaller orders placed at regular intervals. If you are asking what is TWAP, it stands for time weighted average price, an execution method designed to reduce market impact. This guide explains how a TWAP order works and how to set one up on the Bybit website and app.

Key takeaways:

• TWAP orders split large trades over time to reduce market impact

• They work best when quality of execution matters more than speed

• Bybit supports TWAP on Spot, Perpetual and Futures markets, with controls that can trigger or terminate a strategy.

What is a TWAP order?

A TWAP order — short for time-weighted average price — is a trading strategy that executes a large order gradually over a fixed period of time. Instead of placing the entire order at once, the total quantity is divided into smaller trades that are executed at regular time intervals.

The goal of a TWAP order is to achieve an average execution price close to the market’s average price during that time window, rather than reacting to short-term price swings. This makes TWAP different from market orders, which execute immediately at the best available price, and from iceberg orders, which split trades by visible size rather than by time.

On Bybit, TWAP orders are available for both spot and derivatives markets, giving traders a structured way to manage execution risk when trading larger positions.

How TWAP orders work on Bybit

When you place a TWAP order on Bybit, the system doesn’t execute the full trade immediately. Instead, it splits the total quantity into smaller orders, and executes them evenly over a defined period of time. This time-based approach helps smooth execution and reduces the impact of short-term price fluctuations.To set up a TWAP order, you define three key parameters:

• total quantity or value is the full size of the trade you want to execute

• running time can be set from 5 minutes to 24 hours

• frequency sets each sub-order interval from 5 to 120 seconds, with 30 seconds as the default

Choose Market Order or Limit Price for each sub-order. Random Order varies each sub-order by ±20% from the specified quantity or value. An optional Trigger Price starts the strategy when the last traded price reaches it, while a Stop Price terminates the strategy when reached. Full execution is not guaranteed and insufficient balance can terminate the strategy.

Step-by-step: How to place a TWAP order on Bybit (website)

Step 1: Open the TWAP tool

Log in to Bybit and open the trading page for the market you want to trade, such as BTCUSDT. In the order panel, click on Tools and select TWAP to open the TWAP order window.

Step 2: Create your TWAP order by filling in the parameters. You can also set advanced parameters, such as Distance to the Best Bid/Ask, Trigger Price and Stop Price, via the Advanced Settings dropdown menu.

Step 3: Ensure all the information you entered is correct and hit Confirm.

Terminate your TWAP strategy

In the order panel, click Tools, and then select TWAP. Here, you will be able to view the details of the strategy, including Filled Size/Total, Avg. Filled Price, Price Limit and more. To terminate your TWAP strategy, click Terminate.

View your order history

You can view your order history in the following ways:

From order panel

To view details of your filled sub-orders, go to Tools and select Details in the relevant TWAP strategy.

Alternatively, go to Order History or Trade History tab. Orders placed using the TWAP strategy can be identified with the TWAP label.

From Unified Trading order page

To view your active and untriggered TWAP strategies, go to Tools History and select TWAP as Tools Type. Click Details to see all the sub-orders filled via the TWAP strategy.

Alternatively, head to the Order History tab. Orders placed using your TWAP strategy can be identified via the TWAP label under Order Type.

Step-by-step: How to place a TWAP order on the Bybit App

Step 1: Tap Trade at the bottom of the Bybit App to enter the respective trading page. Then, switch the Order Type to TWAP.

Step 2: Create your TWAP order by filling in the parameters. You can also set advanced parameters, such as Distance to the Best Bid/Ask, Trigger Price and Stop Price, via the Advanced Settings dropdown menu.

Step 3: Ensure all the information you entered is correct and hit Confirm.

Terminate your TWAP strategy

In the order panel, go to Tools to view the details of the strategy, including Filled Size/Total, Avg. Filled Price, Price Limit and more. To terminate your TWAP strategy, tap Terminate in the relevant strategy card.

View your order history

You can view your order history in the following ways:

From order panel

To view details of your filled sub-orders, go to Tools and tap Details in the relevant TWAP strategy.

From all orders page

To view your active and untriggered TWAP strategies, tap the History icon → Tools and filter the order type to TWAP.

To view details of your filled sub-orders on the All Orders page, simply open the Order History tab. Orders placed using the TWAP strategy can be identified with the TWAP label.

Pros and cons of TWAP orders

TWAP orders work best when execution quality matters more than speed. Used correctly, they help manage risk, but they’re not a one-size-fits-all solution.

Pros

TWAP reduces market impact by spreading a large trade across smaller orders executed over time. This helps avoid sudden price jumps and keeps execution closer to the market’s natural flow. Because the process is automated, traders don’t need to manually time entries or exits, which reduces emotionally based decision-making. This steady, rules-based approach is why institutional traders often use TWAP for large positions.

Cons

TWAP is not suitable for trades that require immediate execution and full execution is not guaranteed. Each account can run up to 30 TWAP strategies at once, with a maximum of 10 strategies per trading pair. A strategy may terminate because of insufficient balance, a position-mode change, risk-limit or open-interest limits, a reached Stop Price or seven days of operation. Sub-orders that fail to match are canceled before the next scheduled placement.

The bottom line

TWAP orders are most effective when used to manage large trades since execution quality matters more than speed. Choosing the right running time and frequency helps reduce market impact while keeping fills aligned with real market conditions. TWAP is less suitable for traders who rely upon instant execution or short-term reactions. If you’re new to TWAP, start with smaller trade sizes to observe how the strategy performs before using it for larger, more disciplined executions on Bybit.

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