What Is a Limit Order?
A limit order buys or sells at a specific price or better (SEC investor bulletin).
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1.What does a limit order tell the market?
A limit order buys or sells at a specific price or better (SEC investor bulletin).
2.What does a market order do?
It usually fills immediately, but the price is not fixed in advance and fast markets can move it (SEC).
3.Which is the catch of a limit order?
So the market order buys certainty of a trade and the limit order buys control of price.
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Sources (4)
- U.S. Securities and Exchange Commission, Office of Investor Education and Advocacy: Investor Bulletin "Trading Basics: Understanding the Different Ways to Buy and Sell Stock" (Pub. No. 141, March 2011)
- 17 CFR 242.600 (Regulation NMS, Rule 600 Definitions)
- SEC Division of Trading and Markets: Memorandum to the Equity Market Structure Advisory Committee, "Issues Affecting Customers", 26. January 2016
- Eigene Rechnung: Orderbuch einer erfundenen Aktie (Uebungsaufgabe)
Education only. Not financial advice.