Orders tell your broker how to buy/sell. Market orders execute fast at current price; limit orders at your price or better. Understanding them builds good habits let’s break it down simply.
What is a Market Order?
Executes immediately at the best available price.
Pros: Quick, guaranteed fill (in normal markets).
Cons: Price can slip in volatile times (e.g., you pay more than expected).
When to use: Liquid stocks like ASX blue-chips, when speed matters over exact price.
Example: Market buy BHP if quoted $40, you get it near $40, but could be $40.05 if market moves.
What is a Limit Order?
Executes only at your specified price or better.
Pros: Control price, avoid surprises.
Cons: May not fill if market doesn’t hit your price.
When to use: Volatile stocks, or when you have a target (e.g., buy below current price).
Example: Limit buy BHP at $39 if price drops to $39 or less, it fills; otherwise, waits.
Key Differences
Speed: Market = instant; Limit = waits for price.
Price control: Market = none; Limit = full.
Risk: Market risks slippage; Limit risks missing the trade.
In 2025, with fast markets, use limit for precision.
When to Choose Each
Market: Quick entry/exit in stable conditions.
Limit: Buying dips or selling rallies.
Pro tip: Combine with stop-loss for protection.
FAQs
Start with limit to learn control.
No, same commission.
Limit orders can stay active; market only during open.
Key Takeaways
Market for speed, limit for control practice both in demo.
Join EdgeDeskAU for more order type guides.
Disclaimer: Education only. Orders don’t guarantee profits; markets can gap.