Market order

Market orders are unlimited buy or sell orders that shall be executed at the next price determined.

The probability of execution is highest with Market Orders. Traders use Market Orders when orders need to be executed as quickly as possible.

Limit order

Limit orders are bid/ask orders, which are to be executed at their specified limit or better.

Stop market order

A stop market order is only placed in the order book when the stop limit is reached, and it is then treated as a market order.

If, to buy a share at the current price, a stop market order (also known as a stop buy order) is used, the order is triggered when the price is reached and the share automatically bought at the next possible price. If, to buy a share beneath the current price, a stop market order (also known as a stop loss order) is used, the order is triggered when the price is reached and the share is automatically sold at the next possible price.

There is no guarantee of execution of an order triggered by the stop price.

In the case of rising prices, stop buy orders are an attempt to follow the trend by buying the security.

Traders use stop loss orders to limits losses or securing gains in positions they have taken.

Stop limit order

With a stop limit order, the order is placed in the order book not as a market but rather as a limit order once the stop limit is reached.

If, for example, a stop limit order with a stop limit of 101 and an execution limit of 102 is placed as a buy order, and the 101 price level is reached, a buy order with an execution limit of 102 is automatically placed. If, in the meantime, the price has gone above 102, the limit order is not executed. As such there is no guarantee of execution. The limit order is not executed at the next price determined if in the case of stop buy orders the next price is above the price limit and in the case of stop loss orders below the price limit.