Chapter 4 of 12All chapters
Chapter 4 of 12
Order types
Market, limit and stop.
The three you need
A market order executes immediately at the best available price. A limit order waits for the price you name and may never fill. A stop order becomes an order once a price is reached.
- Market orders guarantee execution, not price. Limit orders guarantee price, not execution.
- In a fast or thin market the difference between the two can be large.
Time in force
Orders can last for the day, until cancelled, or until a date. Leaving a stale order open for months is a common way to be surprised.