When trading perpetual futures, placing a large order all at once can have a noticeable impact on market price and may result in higher slippage.
TWAP offers a smoother execution method for users who want to complete their trades gradually over a period of time.
What is TWAP?
TWAP stands for Time-Weighted Average Price.
It is an order execution strategy that splits a large order into multiple smaller sub-orders and submits them to the market gradually over a set period, instead of executing the entire order at once.
You can think of it as a way to "place orders in batches and execute them over time." This approach focuses more on achieving smoother execution rather than completing the entire trade at a single point in time.
When is TWAP useful?
TWAP is generally more suitable in the following situations:
You are trading a relatively large amount or position size and want to reduce market impact
You want to avoid obvious slippage caused by taking liquidity all at once
You prefer to build or reduce a position gradually over time
Immediate full execution is not necessary, and execution pacing matters more
If your order size is relatively small, or if your priority is to complete the trade as quickly as possible, a regular order type may be more straightforward.
How does TWAP work?
After a TWAP order is created, the system splits the total order amount into multiple sub-orders and executes them gradually based on the configured amount and time period.
During this process, actual execution is still affected by market price, order book depth, liquidity, and volatility.
This means TWAP is not simply "averaging the price," nor does it guarantee that every sub-order will be filled at an ideal price. If market conditions change quickly, the final execution result may differ from your expectations at the time the order was placed.
What are the benefits of using TWAP?
For larger trades, the main value of TWAP is that it helps reduce the market impact of executing the entire order at once.
Compared with a one-time order, batch execution can make the trading process smoother and may be more suitable for users who want to follow a planned execution schedule.
It is important to note that the purpose of TWAP is to optimize execution, not to guarantee the lowest cost or the best possible price.
In some market conditions, TWAP may help reduce slippage. In others, the final execution price may still be less favorable than a one-time execution.
Does TWAP have extra fees?
According to Hyperliquid's official documentation, TWAP is a type of order. At this time, there is no clear indication that TWAP carries a separate additional fee. A more appropriate understanding is that TWAP orders are charged according to the standard trading fee rules during execution.
For details on fee tiers, discount rules, Builder Fees, and other related charges, please refer to OneKey App Wallet Service Fee Explanation.
Before using TWAP
TWAP is designed to help optimize the execution of large orders, but it does not eliminate market risk.
In highly volatile markets, or when liquidity is limited, some sub-orders may not be fully filled, and the final average execution price may differ from expectations.
Before using TWAP, we recommend evaluating it based on your trading goals, position size, and risk tolerance.