Limit orders set a price; market orders execute immediately
Order (exchange)
Limit orders set a price; market orders execute immediately
Limit orders are used to specify the maximum price you are willing to pay for a stock or the minimum price you are willing to accept for a stock. Market orders, on the other hand, are executed immediately at the best available price.
Example
If you want to buy shares of Apple at $150 or less, you would place a limit order. If you want to buy shares of Amazon right now, regardless of the price, you would place a market order.
Understanding the difference between limit and market orders is crucial for effective trading strategies.
Related concepts
Short (finance)
Short selling involves borrowing shares to sell, hoping to buy back cheaper
Stock split
Stock split doubles shares, halves price
Color depth
Market depth measures buy/sell volume at each price level
Market maker
AMMs use a formula instead of an order book for trading
Bid–ask spread
Bid-ask spread measures transaction costs and liquidity
Supply and demand
Market-clearing price where quantity supplied equals quantity demanded
Educational content, not financial advice.
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