PlayInfoBox

Home /Investing /Stock Order Types Explained: Limit, Market, and Beyond

Stock Order Types Explained: Limit, Market, and Beyond

Here's a walk-through of the main order types you'll run into when placing a trade.

Limit Order

The most basic order type: you set your own price, and the order only fills at that price or better -- at or below it for a buy, at or above it for a sell. You'll never get filled at a worse price than you set, but if the market never reaches your price, the order may never fill at all.

Market Order

An order with no set price, filled immediately at whatever price is currently available. It fills the fastest of any order type, but depending on how much volume sits at the best available price, you can end up paying more -- or receiving less -- than expected. That price impact, known as slippage, tends to be worse in thinly traded stocks.

Auction-Conversion Limit Order

Some brokers and exchanges offer a limit order that automatically converts to a market order if it hasn't filled by the closing auction, so it still has a shot at executing before the session ends instead of carrying over unfilled to the next day. It's useful when you want to try for your target price during the day but don't want to risk missing the trade entirely. Exact availability and naming vary by broker and market, so check your platform's order screen.

Marketable Limit Order

An order automatically priced at the best available price on the opposite side of the book at the moment you submit it -- the best ask for a buy, the best bid for a sell. It's built to fill quickly if there's enough volume sitting at that price, though any amount beyond what's available there may go unfilled or get canceled. This kind of order goes by different names across brokers and exchanges.

Priority Limit Order

An order automatically priced at the current best price on your own side of the book -- the best bid for a buy, the best ask for a sell. It's designed to get you toward the front of the queue at that price level rather than to fill instantly, and unlike a marketable limit order, there's no guarantee it fills right away -- it only fills once someone trades against it.

IOC and FOK Conditions

IOC (Immediate or Cancel) and FOK (Fill or Kill) are fill conditions you attach to a limit or market order rather than order types on their own. IOC fills whatever quantity it can immediately and cancels the rest right away instead of leaving it queued. FOK rejects the entire order unless the full quantity can be filled immediately, with no partial fill allowed.

Which order type should you actually use?

If speed matters more than price, a market order or marketable limit order gets you filled fastest. If holding your price is the priority, a plain limit order is the safer default. The more specialized order types -- auction-conversion and priority limit orders -- can feel unfamiliar at first, so it's reasonable to stick with plain limit orders until you're comfortable with how your specific broker's other order types behave.

Order type names and availability vary by broker and market

Not every broker or exchange offers the same menu of order types, and even similar order types can go by different names from one platform to the next. Before relying on anything beyond a basic limit or market order, it's worth pulling up your broker's own order-type documentation or order screen to confirm exactly what an order will do -- the underlying mechanics described here are common across markets, but the specific implementation is platform-dependent.

Frequently Asked Questions

What's the safest order type for a beginner?

A limit order, since you're setting the price yourself and know exactly what you're getting into. A market order fills faster but can execute at a price you didn't expect, so it's worth using carefully until you're used to how your broker handles it.

Does an auction-conversion limit order guarantee a fill?

Not always. It converts to a market order at the closing auction to raise the odds of filling that day, but in unusual situations like a trading halt, it may still go unfilled.