What Are Order Types in Trading? Market, Limit & Stop Orders

Order types are instructions that determine how a trader wants to buy or sell an asset. They are submitted with a broker and specify the “quantity” as well as “price” conditions under which they can be executed.

The three most common types of orders in trading are:

Order type	Explanation	How it Works
Market Order	A market order instructs the broker or trading platform to buy or sell immediately at the best available price.	Executes immediately at the “best available price” in the market.
Limit Order	A limit order specifies the: Maximum price acceptable for a purchase or Minimum price acceptable for a sale.	Executes only at the specified price or a better price.
Stop Order	A stop order is activated when the market reaches a specified stop price. Once triggered, it generally becomes a “market order”.	It becomes a market order once the specified stop price is reached.

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What are Order Types in Trading?

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