The concept
A executes immediately at the best available price. A limit order waits for a specified price or better. A stop order becomes a market order once a trigger price is reached.
Why it matters
Order type decides whether you prioritise certainty of execution (market) or certainty of price (limit).
How markets interpret it
Stops are commonly used to exit losing positions; limits are commonly used to enter at a chosen level or take profit.
Key takeaways
- Market = speed; limit = price control.
- Stops can slip in fast markets.
Knowledge check
Which order guarantees execution but not price?
Key terms · hover or tap for a definition