1. Market Order: Buy or sell quickly at the current market price.
A market order is executed at the best available price in the order book, which is based on the limit order prices. This means you cannot be 100% sure of the execution price. When the price you receive differs from your expected price, slippage may occur.
※The main advantages of market orders are simplicity, immediacy, and efficiency, allowing transactions to be completed in most situations.
※However, market orders carry the risk of slippage and require you to manually place the order.
2. Limit Order: Place an order at a specific price or better.
If the price is at or below your limit price, a buy limit order will be executed. If the price is at or above your limit price, a sell limit order will be executed.
The limit price is set by you, and the order will only be executed when the market price reaches your limit. This allows you to buy below the current market price or sell above it.
※ Unlike market orders, which are executed immediately at the current price, limit orders give you better control over the execution price.
※ Since limit orders are executed automatically, you do not need to monitor the market 24/7, and you do not need to worry about missing trading opportunities. However, there is no guarantee that your limit order will be executed.
※ If the market price never reaches your limit price, your order will remain unfilled in the order book.