Lesson 5 of 5 · 4 min read
Market vs. limit orders
How to buy exactly at the price you want.
Market order
Buys/sells immediately at the best available price. Fast, but you only know the exact price afterwards.
Limit order
You set a maximum buy price or minimum sell price. The order only executes if the market hits your price. Control over speed.
When to use which?
Liquid stocks (like Apple): a market order is fine. Small, volatile stocks: use limit orders so you don't overpay.
Stocky says
With an illiquid stock, a market order can cause 'slippage': you think you're paying €10 but get €10.40 because there are few sellers. A limit order prevents such surprises.
Remember this
- Market order: buys/sells immediately at the best price — fast, but the price is only certain afterwards.
- Limit order: only executes at your price — control over speed.
- Large, liquid stocks: a market order is fine. Small, volatile ones: use a limit order.
- A limit order prevents 'slippage' (unintentionally overpaying) on illiquid stocks.
There is a quiz for this lesson
2 questions that check whether it stuck. They live in the app, because a quiz nobody grades teaches nothing.
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