How to distinguish between trigger price and order execution price

In the world of futures trading and derivatives, two terms often cause confusion among traders: trigger price and order target price. While they sound similar, they serve completely different functions in the trading process.

What is the trigger price

The trigger price is an activation mechanism. When you set an order with a condition, this level serves as a signal for the system to start working. Imagine you are monitoring the movement of an asset’s value but do not want to constantly sit in front of the screen. You set the trigger price at 523 — when the market price reaches this level, your order will be activated. But this is only the first step.

The execution price is the actual goal

After the order is triggered at the trigger price, the next is the second price — the one at which you actually want to buy or sell the asset. For a limit order, this means the maximum rate if you are buying, or the minimum rate if you are selling. If you set this price at 523, the order will attempt to execute exactly at this level after activation.

Practical example

Let’s consider a scenario. You forecast an increase but want to enter at a certain level. You set the trigger price at 520, and the execution price at 523. When the price reaches 520, the order is activated. After that, the system will try to execute it at 523 or better. This allows you to trade under conditions without constantly monitoring the market.

The key difference

The trigger price is a doorbell — a signal to start working. The execution price is your actual intent — the level at which you are ready to complete the operation. This setting is standard for conditional limit orders, where the order should only be placed under specific market conditions.