Frequently Asked Questions
FrequentlyAsked Questions
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The main difference between a market order and a limit order lies in how the trade is executed and the level of control you have over the execution price.
Market Order:
- Execution: A market order is executed immediately at the best available current price.
- Price Control: You do not have control over the exact price at which the order is executed. It will be filled at the market price at the time the order is placed.
- Use Case: Market orders are ideal when you want to buy or sell an asset quickly and are less concerned about the exact price.
Limit Order:
- Execution: A limit order is executed only at a specific price or better. For a buy limit order, it will be filled at the limit price or lower; for a sell limit order, at the limit price or higher.
- Price Control: You have control over the price at which the order is executed. The order will not be filled unless the market reaches your specified price.
- Use Case: Limit orders are ideal when you want to buy or sell an asset at a specific price and are willing to wait for the market to reach that price.
Summary:
Market Order: Fast execution at the current market price; no price control. Limit Order: Controlled execution at your specified price or better; may not be executed if the market price does not reach your limit. By understanding these differences, you can choose the order type that best suits your trading strategy and goals.