Each order type balances execution speed against price certainty.
An instruction to buy or sell a security immediately at the best available current price. Market orders prioritize execution speed over price. While appropriate for small positions in highly liquid tickers during normal trading hours, they expose you to slippage in volatile markets. For larger blocks, a market order is a signal that high-frequency market makers can exploit to worsen your fill price (see section “Market Microstructure and Execution for Larger Orders”).
A limit order specifies the maximum price you are willing to pay as a buyer, or the minimum you will accept as a seller. This provides absolute price control at the expense of execution certainty; if the market never touches your limit price, the order remains unfilled.
A Limit on Close (LOC) order executes only at the official closing price of the trading day, and only if the closing price meets or beats your specified limit. This is a common tool for matching index benchmarks while bounding price risk.
A stop order (often called a stop-loss) remains inactive until a specified stop price is touched, at which point it instantly converts into a market order. While useful for preventing catastrophic downside, they can be triggered by short-term market noise, forcing a liquidation at a local trough.
Similar to a stop order, but once the stop price is triggered, it becomes a limit order rather than a market order. This prevents execution at extremely unfavorable prices during a flash crash, but introduces the risk that the order will not fill if the price falls past your limit faster than it can execute.
These orders set a stop price at a dynamic dollar amount or percentage below (for sells) or above (for buys) the market price. The trigger price moves upward in tandem with the asset’s price but remains fixed when the asset declines, letting you capture upside while establishing a trailing floor. Once triggered, it executes as a market order (or limit order, if configured as a trailing stop-limit).