An order is an instruction to buy or sell. Choosing the right type controls the trade-off between getting filled and getting your price.
The three you need
| Order | What it does | Use when |
|---|---|---|
| Market | Fills immediately at the best available price | You want certainty of execution |
| Limit | Fills only at your price or better | You want price control |
| Stop | Becomes a market order once a trigger price is hit | You want to cap a loss or breakout-buy |
Market orders
Fast and certain, but you accept whatever price is available. On liquid, large funds the difference is tiny. On thin or fast-moving names, you can get a worse fill than expected — called slippage.
Limit orders
You set the worst price you will accept. A buy limit fills at your limit or lower; a sell limit at your limit or higher. The risk: if price never reaches your limit, the order does not fill.
Stop orders
A stop-loss triggers a sell once price falls to your stop, helping cap a loss. A stop-limit adds a price floor so you are not filled at a wild price — but it may not fill at all in a fast drop.
A plain stop becomes a market order when triggered, so in a gap or flash move you can be filled far below your stop. Know which variant your broker uses.
The bid-ask spread
Every quote has a bid (highest price buyers will pay) and an ask (lowest sellers will take). The gap is the spread — a hidden cost. Tight spreads (large ETFs, big stocks) are cheap to trade; wide spreads (thin names) are expensive.
For long-term investing in big funds, market orders are fine. For anything thin, fast, or large relative to volume, default to limit orders.
Next: learn to read what price is doing in Reading a Chart.