Orders05
Market order or limit order
Compare execution priority with price control before choosing an instruction.
Market order
A market order prioritises execution at the best available prices. It does not protect one exact price and can fill across more than one level.
Limit order
A limit order protects the price boundary you set. A buy will not execute above its limit and a sell will not execute below its limit, but execution is not guaranteed.
Match the instruction to your intent
Ask whether your priority is getting the order handled now or refusing a worse price. Then consider liquidity, spread, quantity, and current market conditions.
Example
A patient buyer may set a lower limit and accept that no trade happens.
Three things to keep.
- 01Market means price uncertainty
- 02Limit means execution uncertainty
- 03Review side and quantity too
Can a limit order remain unfilled even when the share trades that day?
Show the answer +
Yes. The market may never reach your limit, or other orders may be ahead of yours at the same price.