Market Orders vs. Limit Orders: What's The Difference?
Last updated
Last updated
Understanding the order types
On the order (or buy/sell) panel, you can place the following order types.
A market order executes immediately at the current best available market price.
A limit order lets you set a minimum price for the order to execute.
A stop-limit order lets you specify the stop price for an order to execute. If the market order price falls to your stop price, your order will trigger a sell.
A market order is an order that executes immediately at the current market price. Market orders cannot be cancelled because they are filled immediately. Market orders may be partially filled at several prices; each part of your order will be shown in the Order panel below the Price Chart.
Keep in mind:
Market orders are always taker orders because your order is being executed immediately and you’re taking liquidity out of the market.
There is no guarantee that a market order will be filled at the buy or sell price you set.
Due to extreme market movements, the executed price of market order may be lower/higher than the last traded price that user may have seen, user needs to pay attention to the market depth and price fluctuations. For example, a market buy submitted when the last trade price is $4,000 will only fill at price levels below $4,400. Protection points help prevent large orders from causing more than 10% slippage.
A limit order is a buy or sell order that executes at the minimum price you set or better. Limit orders also feature enhanced order options like expiration and execution instructions. For a buy limit order, your maximum price—also known as the limit price—is what you’ll pay to purchase an asset. For a sell limit order, your order will execute at your limit price or higher.
A stop-limit order allows you to automatically place a limit order to buy or sell when an asset’s price reaches a specified value, known as the stop price. This order type helps traders protect profits, limit losses, and initiate new positions.
With a stop-limit order, you need to select both the stop price and limit price. The order will be executed only at the specified limit price or a better price. Once the asset reaches the stop price, the system will seek to match your order within the order book.
However, the order will only be filled if the specified price or a better price — which is typically closer to the Last Price — is available.
Note: If the limit price or a better price is unavailable in the order book, the order will not be triggered. To avoid this, the limit price should be lower than the trigger price.
