Market, limit and stop orders on exchanges

A market order buys or sells immediately at the best available price, a limit order only fills at your chosen price or better, and a stop order waits for a trigger price before it becomes active. Choosing the right one helps you control price, speed and risk.

Market orders

A market order prioritises speed. It takes whatever liquidity is in the order book until your quantity is filled. You are almost certain to get filled, but in a thin or fast-moving market you may suffer slippage, meaning a worse average price than you saw on screen.

Limit orders

A limit order sets the worst price you will accept. A buy limit fills at your price or lower, and a sell limit fills at your price or higher. If the market never reaches your level, the order simply waits in the book, possibly forever, unless you cancel it.

Many exchanges also offer a post-only option, which cancels a limit order if it would fill immediately. This matters for fees, covered in the next module.

Stop orders

A stop order sits dormant until the price touches a trigger level, called the stop price. Two common versions:

• Stop-market: once triggered, it sends a market order. It will almost always fill, but the price may be worse than the stop in a sharp move.
• Stop-limit: once triggered, it places a limit order at a price you set. You control the price, but it might not fill if the market gaps past it.

Key takeaways

• Market orders are fast but can slip; limit orders control price but may not fill.
• Stop orders activate only when a trigger price is reached.
• Stop-market favours getting out; stop-limit favours price control.
• No order type removes risk entirely, especially during sharp moves.