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Lesson 88 · Written for kid, teen, and little

Market Orders and Limit Orders

A market order trades fast; a limit order waits for your price.

The idea

When you buy a stock, you don't just say what to buy — you also tell your broker how to buy it. A market order means "buy right now at whatever the next available price is": it almost always goes through, but the price you get can differ from the one you saw on screen. A limit order means "buy only at my price or better", like saying $50.00 or less: you control the price, but if the stock never reaches it, the order just sits there unfilled. Neither one is better than the other — one buys you speed, the other buys you control. 🎯

A

Words to know

5

Broker

The company that places your buy and sell orders for you. You tap Buy, and the broker is who actually goes and does it.

Market order

An order that says: buy or sell right now, at whatever the next price is. Fast, but you do not get to pick the price.

Limit order

An order that says: only trade at my price or better. Set $50 and it waits — it will not buy at $52.

Limit price

The highest you will pay when buying, or the lowest you will take when selling. Buying with a $50 limit means never paying $51.

Filled

An order is filled when its trade executes. A buy limit order can execute at the limit price or lower, but reaching that price does not guarantee a fill.

Try it — no accountTrue or false

True or false? Swipe through these statements about the two main order types.

Card 1 of 4

A market order buys right away at whatever the current price is.

Swipe the card — or tap.

In the full lesson

  1. 1True or false
  2. 2Work out the number
  3. 3Make the call

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