The Key Difference Between Market Order and Limit Order

Market Order vs Limit Order
Feature	Market Order	Limit Order
Definition	An order to buy or sell a security immediately at the best available current price.	An order to buy or sell a security at a specified price or better.
Execution Speed	Executed immediately at the current market price.	Executed only if the market reaches the specified limit price or better.
Price Control	No control over the execution price; subject to market fluctuations.	Full control over the price at which the order is executed.
Risk	Risk of price slippage, especially in volatile or illiquid markets.	Risk that the order may not be executed if the price is not reached.
Use Case	Used when immediate execution is more important than price.	Used when price precision is important and trader is willing to wait.
Order Priority	Higher priority for execution since it fills at the best available price.	Lower priority; fills only when price conditions are met.
Partial Fills	Possible if full quantity not available at best price.	Possible; order may be partially filled at limit price over time.
Market Impact	May cause price movement if large volume is executed immediately.	Minimal market impact as order executes only at specified prices.
Typical Users	Day traders, investors wanting fast entry/exit.	Traders focused on cost control and specific entry/exit points.
Example	Buying 100 shares of a stock immediately at the current price $50.	Placing an order to buy 100 shares only if the price drops to $48 or lower.
Order Cancellation	Cannot be canceled once submitted as it executes immediately.	Can be canceled anytime before execution.