Trading glossary
Compare market orders and limit orders, learn how each executes, and understand the trade-off between speed of execution and control over price.
A market order tells the market to buy or sell right away at whatever price is currently available. A limit order sets a specific price, buying only at or below it or selling only at or above it. The core difference is what each prioritizes: a market order prioritizes speed of execution, while a limit order prioritizes control over the price you accept.
With a market order, you are likely to fill quickly, but the exact price is not guaranteed and can move in fast markets, an effect called slippage. With a limit order, you control the price but may wait, and the order may never fill if the market does not reach your level. Choosing between them depends on whether execution speed or price certainty matters more.
Market orders suit situations where getting in or out promptly outweighs a small price difference. Limit orders suit cases where a precise entry or exit price matters more than immediacy. Both are basic order types available on most trading venues. This is educational information, not personalized advice; every order carries market risk, including the possibility of loss.
Slippage is the difference between the expected price and the actual fill price. It can occur with market orders in fast-moving or thinly traded markets, where prices shift before the order completes.
A limit order fills only at your specified price or better. If the market never reaches that price, the order stays open and may expire or be canceled without executing.
Neither is universally better. Market orders favor speed of execution; limit orders favor price control. The right choice depends on your priorities and the specific market conditions.