Market order vs limit order: speed or price

What this video covers

The trade-off between a market order’s certain fill and a limit order’s certain price, plus what happens when a stop order triggers. When the page recommends using limits.

Sources and the longer explanation: Market Order vs Limit Order: What Is the Difference?.

How the visuals were made

In 0:45 the video moves through 7 scenes, including a side-by-side comparison of Market order and Limit order; a checklist, “When to prefer a limit”; a worked formula card (100 × ($50.20 − $50.00) = $20); a side-by-side comparison of Limit at $50.05 and Stop-limit. All graphics were rendered frame by frame by UXS; no stock footage, logos or faces are used.

Chapters

• 0:00 Market order or limit order?
• 0:05
• 0:13 Stop triggered? Now a market order
• 0:16 When to prefer a limit
• 0:20 Slippage on a market order
• 0:31
• 0:41 Risk note

Transcript

Market or limit? It is a trade-off between a certain fill and a certain price.

A market order fills right away, but the price isn't guaranteed. A limit order fills only at your price or better, but may never fill.

Stop orders become market orders once they are triggered.

Use limit orders in thin, fast-moving or after-hours markets.

Example: you buy 100 shares at market when the screen shows $50, but fill at an average of $50.20. That slippage costs $20.

With a limit at $50.05, you fill at $50.05 or better, or not at all. A stop-limit protects price too, but may not fill.

Educational only, not financial advice.