> For the complete documentation index, see [llms.txt](https://docs.bullpen.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bullpen.fi/trading/order-types/twap.md).

# TWAP

Time-Weighted Average Price. Splits a large order into smaller pieces executed every 30 seconds.

## Use When

Executing large orders without moving the market.

## Parameters

* **Asset**: The token or contract you want to trade
* **Total Size**: Complete order size to execute over time
* **Direction**: Buy/Sell
* **Duration**: How long to spread the order (in minutes)
* **Reduce Only** (optional): Only reduces existing position

## How It Works

1. You specify total size and duration
2. Bullpen/Hyperliquid calculates suborder size and frequency
3. Every 30 seconds, a small market order executes
4. Process continues until duration expires or full size is filled
5. Final average execution price is calculated

## Execution Details

* **Suborder frequency**: Every 30 seconds
* **Suborder slippage**: Max 3% per suborder
* **Catch-up mechanism**: If suborders don't fill (wide spread, low liquidity), TWAP tries to catch up
* **Catch-up size cap**: Catch-up suborders capped at 3x normal size
* **Early completion**: Can complete before duration if all size fills efficiently

## Example

**TWAP Order**

* Total size: 100 BTC
* Duration: 60 minutes
* Suborders: \~120 suborders (one every 30 seconds)
* Size per suborder: \~0.83 BTC

Each suborder executes as a market order with 3% max slippage. Final execution price is the weighted average of all fills.

## Benefits

### Reduced Market Impact

* Avoids dumping large orders that move price
* Blends into natural market flow
* Better average price on large positions

### Predictable Execution

* Systematic, emotionless execution
* No timing decisions
* Reduces trader stress

### Slippage Control

* 3% max per suborder (vs unlimited on single market order)
* Total slippage often much lower than one large market order

## Drawbacks

### Price Risk

* Exposure to price movement during duration
* If price trends against you, later fills are worse
* No guarantee of execution at current price

### Not Instant

* Takes time to complete
* Not suitable for urgent entries/exits

### Visible on Chain

* Sophisticated actors may detect TWAP patterns
* In thin markets, still creates predictable flow

## When to Use

✅ **Good for:**

* Large position entries (>$100k)
* Building positions over time
* Reducing slippage on illiquid assets
* Accumulation/distribution phases

❌ **Not good for:**

* Urgent exits
* Stop losses
* Small positions
* Highly time-sensitive trades

## Best Practices

* **Size threshold**: Use for orders >5% of orderbook depth
* **Duration selection**:
  * Short (5-15 min): Normal liquidity
  * Medium (30-60 min): Thinner liquidity or very large orders
  * Long (>1 hour): Extremely large positions or quiet markets
* **Monitor execution**: Watch suborder fills in case you need to cancel
* **Combine with limit orders**: For non-urgent large positions, scale in with limit orders instead
* **Market conditions**: TWAP works best in stable markets; avoid during high volatility

## TWAP vs Market Order vs Limit Ladder

| Factor        | TWAP         | Market Order     | Limit Ladder         |
| ------------- | ------------ | ---------------- | -------------------- |
| Speed         | Slow         | Instant          | Variable             |
| Slippage      | Low-Medium   | High             | Lowest               |
| Certainty     | High         | Guaranteed       | Low                  |
| Market impact | Low          | High             | Lowest               |
| Best for      | Large orders | Urgent execution | Patient accumulation |


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