Market Order vs. Limit Order: Cost, Fill Risk, and Examples
A market order prioritizes prompt execution but does not set a maximum purchase price or minimum sale price. A limit order sets that price boundary but may fill only partly or not at all. The practical choice is therefore not "fast versus cheap." It is a trade-off between execution certainty, price protection, liquidity, timing, and what happens if the order remains unfilled. Quick answer A market buy generally seeks the next available selling price, while a market sell generally seeks the next available buying price. It can execute away from the last-traded price or the quote visible when the order was entered. A buy limit order can execute only at the limit price or lower. A sell limit order can execute only at the limit price or higher. The price boundary does not guarantee any execution. Market order: no investor-set price boundary; prompt execution is the priority. Limit order: investor-set worst acceptable price; execution is conditional. Marketable limit o...