Order
An order is an instruction to a broker or exchange to buy or sell a specific quantity of an asset under conditions you set, such as price or timing.
Every trade starts as an order: buy or sell, how much, at what price, and for how long. Choosing the right kind of order is one of the simplest ways to control costs and risk. This entry is the overview: what goes into an order, the main order types, how long orders stay active, and which order to use when. Each order type also has its own detailed entry.
- Category
- Order Types
- Reading time
- 4 min
- Also called
- Trade order, Buy order, Sell order
- Updated
An order in plain words
An order is like a shopping instruction with conditions: “buy 50 shares, but pay no more than $20”, or “sell everything if the price falls to $18”.
The two basic choices are speed or price. A market order fills right away at whatever price is available; a limit order waits for your price but might never fill.1 See Market Order and Limit Order.
How to fill in an order ticket, step by step
Choose the asset
Check the symbol and the market it trades on.
Choose buy or sell
Selling something you do not own opens a short position. See Short Selling.
Set the quantity
Size it from your risk, not from a round number. See Position Sizing.
Choose the order type
Market, limit, stop or stop-limit.
Set time in force
Day order, good-till-cancelled, or fill-or-kill.2 See Time-in-Force: IOC, FOK and GTC.
Review and send
Check price, size and direction before confirming.
Worked examples
Example 1 — Market vs. limit
Trade-offA stock is quoted $30.00 / $30.05. You want 200 shares.
| Market order | Fills now at about $30.05 |
| Limit at $30.00 | Fills only if a seller comes down to $30.00 |
Market orders buy certainty of execution; limit orders buy certainty of price.
Example 2 — A stop to limit the loss
Planned exitYou buy at $30.05 and place a sell stop at $28.50. The price drops to $28.40.
| Stop triggered | At $28.50 |
| Fill | Around $28.45–28.50 |
| Loss per share | ≈ $1.60 |
A stop turns a planned exit into an automatic order. See Stop Loss and Stop Order.
Example 3 — A typo that costs
ErrorA trader means to buy 100 shares but types 1,000, using a market order in a thin stock.
| Intended cost | ≈ $3,000 |
| Actual | ≈ $31,000 at worse prices |
Always review the ticket. Limit orders cap the damage of a mistake.
The main order types
| Aspect | What it does | Main risk |
|---|---|---|
| Market order | Fills immediately at the best available price | Slippage. See Slippage |
| Limit order | Fills at your price or better | May not fill |
| Stop order | Becomes a market order at a trigger price | Fills beyond the stop in gaps |
| Stop-limit order | Becomes a limit order at a trigger price | May not fill in fast moves. See Stop-Limit Order |
Matching the order to the job
Getting in fast
Market order in a liquid market.
Getting a good price
Limit order at or inside the spread.
Capping a loss
Stop or stop-limit order below the entry.
Locking in profit
Limit order at the target or a trailing stop. See Take Profit and Trailing Stop.
Advantages and disadvantages
Advantages
- Lets you set price, size and timing precisely.
- Automatic orders execute your plan without watching the screen.
- Limit orders protect against bad fills.
Disadvantages
- Wrong order type can mean slippage or missed fills.
- Stops cannot prevent gaps.
- Typing errors can be costly.
- Order types and rules differ between brokers.
Going deeper
Read as far as you need. Each level builds on the one before it.
Buy at the ask, sell at the bid
Beginner
A market buy usually fills at the ask, a market sell at the bid. The difference is the spread you pay. See Bid-Ask Spread.
Partial fills
Intermediate
A large limit order may fill in pieces as matching orders arrive. Check whether the rest is still working. See Partial Fill.
Bracket and OCO orders
Advanced
Many platforms link orders: an entry with an attached stop and target, where filling one exit cancels the other (one-cancels-the-other). See One-Cancels-the-Other Order.
Common mistakes
Market orders in thin markets
Use limits when liquidity is low.
Forgetting open orders
Old good-till-cancelled orders can fill unexpectedly.
Not checking the ticket
Review size, side and price every time.
Stops too close to the price
Normal noise triggers them. See Average True Range.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- An order sets side, size, type and duration.
- Market orders favour speed; limit orders favour price.
- Stops automate exits but cannot prevent gaps.
- Time in force decides how long an order stays active.
- Always review the order ticket before sending.
Frequently asked questions
What is the safest order type for beginners?
Why did my limit order not fill?
Can I cancel an order?
Further learning
- Market Order
The fastest way to trade.
- Limit Order
Controlling the price you pay.
- Stop Loss
Using orders to cap losses.
- Order Book
Where waiting orders sit.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- Investor.gov (SEC). Understanding Order Types – Investor Bulletin (opens in a new tab) Checked .
- Investor.gov (SEC). Good-Til-Cancelled Order (glossary) (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.