Chapter 4 · Order Types
Market, limit and stop
Three order types, and everything else is a combination of them.
8 of 66 · 9 min
Market, limit and stop
| Order | What it does | Risk |
|---|---|---|
| Market | Trades at whatever price is available now | You do not choose the price |
| Limit | Trades only at your price or better | May never fill |
| Stop | Becomes a market order once a trigger price is reached | Fills at whatever is there when triggered |
| Stop-limit | Becomes a limit order once triggered | May not fill in a fast move |
Why a stop loss is not a guarantee
A stop at Rs 480 does not sell at Rs 480. It becomes an order when Rs 480 trades, and then fills at whatever the book offers. If the price gaps from 490 to 455, your fill is near 455.
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