What are order types?

Order types in trading refer to specific instructions given by traders to buy or sell financial instruments. These instructions detail conditions like price, quantity, and duration of the order. Different order types are used to execute trades in various ways to match traders' strategies and objectives.

What is a limit order?

A limit order is an instruction to buy or sell a financial instrument at a specific price or better. It ensures that the trade is executed at the specified price or a more favorable one, but it doesn't guarantee execution. Limit orders are used when traders want to achieve a specific price target and are willing to wait for the market to reach that price level before executing the trade.

What is a market order?

A market order is an instruction to buy or sell a financial instrument immediately at the prevailing market price. This type of order guarantees execution but may result in a slightly different price due to market fluctuations between order placement and execution. Market orders are suitable when the speed of execution is more critical than getting a specific price.