06 Aug

Market and limit order

What’s a market order and limit order exactly is and what’s the difference between them? Is one better than the other? With a market order the customer instructs his or her brokerage firm to buy or sell a stock at whatever the price is when the trade is executed, presumably as soon as possible. The advantage of a market order is you are almost always guaranteed your order will be executed (as long as there are willing buyers and sellers). If the price of the stock is moving quickly and there is a delay in the transmission of the order, then the price at which the customer purchases or sells the stock may be very different than what the customer expected when the order was placed and te order can be more or less expensive than limited order.  With a limit order, the customer specifies exactly the price at which willing to buy or sell. Limit orders can help protect you from rapid price changes when markets are highly volatile and fast moving. But remember there is the risk that your limit order may never be executed because the market price may quickly surpass your limit before your order can be filled. However, there is the risk that the limit order will not be executed. Please note, that limit orders usually cost a bit more than market orders, but by using a limit order you protect yourself from buying the stock at too high price.

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