A market order is an order to buy or sell a contract or security at the best price currently available in the market. This order goes to the market signifying that the trader is instructed to buy or sell at the market price and is not much concerned with the price. A market buy order will fill on the ask or offer price while a market sell order will fill on the bid price.
On the other hand, a limit order is an instruction to buy or sell at some specified price. Limit buy orders are placed below the market while limit sell orders are placed above the market. In this sense, execution of a limit order depends on the limit price and the market price: the market may never rise enough or fall enough to trigger a limit order, and a trader (or a customer), using a limit order, may miss the market. A limit order may or may not get executed.
A market order allows an investor to instruct his broker to trade at the best prevailing price, while with a limit order the trade will be effected at a price determined by him. With a market order, the broker will try to execute the instruction in the shortest period of time at the best price he could manage to obtain. Therefore, this order assures speed of execution, though the price that can be obtained remains uncertain. The uncertainty over price can be controlled by the investor asking the broker to execute a limit order. With a limit order to buy (limit buy order), the investor designates the maximum price he is ready to pay for the contract or security. The order can only be executed at that price or lower. For a limit order to sell (limit sell order), the investor specifies the minimum price he will entertain, and the order will then only be executed at that price or higher. Unlike market orders, limit orders take time before they can be executed and possibly not executed if the price limit is not reached.
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