Market orders and limit orders: Before placing an order, understand the difference between two things: the price at which it will be filled, and whether it will be filled at all.

A market order is matched against the quotes currently available in the order book. If there isn’t enough quantity at the best price, an order may be filled across multiple price levels, so the average execution price may differ from the price you saw when placing the order. Watch out for slippage when the market is volatile, liquidity is low, or the order is large.

A limit order lets you set the maximum price you’ll pay to buy, or the minimum price you’ll accept to sell. It will only be filled at your specified price or a better one. However, even if the market reaches your limit price, your order may only be partially filled—or not filled at all—depending on its place in the queue and the available quantity.

So after submitting an order, check its status: filled, partially filled, or still open? Then verify the actual average execution price and fees. Understanding order types helps you know exactly what you’re confirming.

#TradingBasics #OrderTypes