Market and Limit Orders on Interactive Brokers
Want to buy your first stocks but not sure which type of order is better for your case?
Watch this video to find out!
First what is order? The order is a command that you send to your broker: to buy or sell certain stock in certain conditions. So difference between market and limit orders is the conditions you want to trade.
You should use market order if you want to buy stock right now, at the next available price, doesn’t matter what the price it will be. But you should be careful with this orders because price can change and to be more expensive at the moment when the actual transaction happens. For example if you placed the order when market is closed, and when it opened, price went up. But with market order you know it will be closed as soon as possible.
Limit order is the one you should choose if you care about the price you want to buy stock at. You set the price and wait when stock will reach it, and then the order will be closed. SO you have control on the price you buy. But you may wait quite a long time, or even your order may never be closed.