Order Types
Understand the difference between market, limit, and stop orders.
Market Orders
A market order buys or sells immediately at the current best available price. Use market orders when speed of execution is more important than price precision.
Best for: Liquid stocks (high trading volume) where the bid-ask spread is narrow.
Limit Orders
A limit order executes only at your specified price or better.
- Buy limit: executes at your limit price or lower
- Sell limit: executes at your limit price or higher
If the market never reaches your limit price, the order will not execute.
Best for: Setting a maximum price you're willing to pay, or a minimum price you're willing to accept.
Stop Orders
A stop order (also called a stop-loss) becomes a market order once the stock reaches your specified stop price.
- Stop buy: triggers when price rises to your stop price (used to enter a short cover)
- Stop sell: triggers when price falls to your stop price (used to limit losses)
Stop-Limit Orders
A stop-limit order combines a stop and a limit. When the stop price is reached, it becomes a limit order at your specified limit price — not a market order. This gives you price control but risks non-execution if the market moves through your limit quickly.
Order Duration
- Day orders: expire at market close if not filled
- Good-till-canceled (GTC): remain active until filled or manually canceled (up to 60 days)