Market orders & Limit orders

Source: schwab.com (edited)

Market orders and limit orders are common order types used to buy or sell stocks and ETFs.

Different order types can result in vastly different outcomes; it's important to understand the distinctions among them.

Whether you're buying or selling, it's important to identify your primary goal—whether it's having your order filled quickly at the prevailing market price or controlling the price of your trade. Then you can determine which order type is most appropriate to achieve your goal.

What is a market order and how do I use it?

A market order is an order to buy or sell a stock at the market's current best available price. A market order typically ensures an execution, but it does not guarantee a specified price. Market orders are optimal when the primary goal is to execute the trade immediately. A market order is generally appropriate when you think a stock is priced right, when you are sure you want a fill on your order, or when you want an immediate execution.

What is a limit order and how does it work?

A limit order is an order to buy or sell a stock with a restriction on the maximum price to be paid or the minimum price to be received (the "limit price"). If the order is filled, it will only be at the specified limit price or better. However, there is no assurance of execution. A limit order may be appropriate when you think you can buy at a price lower than--or sell at a price higher than--the current quote.

Read more about the pros and cons of Market Orders and Limit Orders on schwab.com