Market Order vs Limit Order
Execute immediately at whatever price is available. Trade only at your specified price or better.
What is the difference between Market Order and Limit Order?
Market order guarantees execution, not price. Limit order guarantees price, not execution.
| Market Order | Limit Order | |
|---|---|---|
| In one line | Execute immediately at whatever price is available. | Trade only at your specified price or better. |
| Example | A market order in a stock quoted $10.00 x $10.40 may fill at $10.40 or worse. | Buy limit at $49.50 on a stock trading at $50 - you wait, and may never get filled if the stock runs. |
| Unit | Positions & Trade Mechanics | Positions & Trade Mechanics |
| Series 65 | Section 3: Client Strategies | Section 3: Client Strategies |
What is Market Order?
An instruction to trade right now at the best available price. It guarantees execution but not price - dangerous in thin or fast-moving markets, where the fill can land far from the last quote.
What is Limit Order?
An order with a price ceiling (buy) or floor (sell). It will not fill at a worse price, which protects against bad fills but means the order may never execute at all.