Market Orders and Limit Orders
A market order trades fast; a limit order waits for your price.
The idea
When you buy a stock, you don't just say what to buy — you also tell your broker how to buy it. A market order means "buy right now at whatever the next available price is": it almost always goes through, but the price you get can differ from the one you saw on screen. A limit order means "buy only at my price or better", like saying $50.00 or less: you control the price, but if the stock never reaches it, the order just sits there unfilled. Neither one is better than the other — one buys you speed, the other buys you control. 🎯
Words to know
- Broker
- The company that places your buy and sell orders for you.
- Market order
- An order that says: buy or sell right now, at whatever the next price is.
- Limit order
- An order that says: only trade at my price or better.
- Limit price
- The highest you'll pay when buying, or the lowest you'll take when selling.
- Filled
- When your order actually happens and the shares change hands.
Try it — no account needed
True or false? Swipe through these statements about the two main order types.
A market order buys right away at whatever the current price is.
In the full lesson
- 1True or false
- 2Work out the number
- 3Make the call
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