BTSE’s Price Protection Mechanism is a feature specifically designed to safeguard users against inadvertent order placement errors and to prevent abnormal trading activities that might negatively impact users. 

An important aspect to note about the Price Protection Mechanism is that in extreme cases, it might temporarily restrict users from placing orders. This temporary restriction, though rare, is a necessary measure to ensure market stability and protect users from extreme price movements and volatility. 

The Price Protection Mechanism is a ratio that is applied to both buying and selling:

Price Protection Ratio

Let’s use an example to better understand this concept. Assume that the current market price of BTC is 40,000 USDT. The Price Protection Ratio for BTC is 5% - let’s see what this means for buy and sell orders:.

For Buy Orders:

With the Price Protection Ratio, the maximum price at which users can buy is capped at 42,000 USDT, calculated as 40,000 × (1 + 5%) = 42,000.

For Sell Orders:

The minimum selling price is set at 38,000 USDT, calculated as 40,000 × (1 - 5%) = 38,000.

It's important to note that whilst these limits apply to orders that will transact in the market (i.e. market orders), they can also apply to other types, such as stop limit orders, stop market orders, take profit limit orders, and take profit market orders. 

Orders outside the limits specified by the Price Protection Mechanism may be deemed invalid.

Limit orders that will not transact instantaneously are not subject to the Price Protection Mechanism. Users are able to freely place limit orders in the order book at the price they wish.