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Market Order vs Limit Order

trader88 — Thu, 27/03/2008 - 19:58

Market order means to buy at the current seller's price (lowest in the sell queue) or sell at the current buyer's price (highest in the buy queue), very simple. Note there is no queuing in market order.

Limit order to sell means queue to sell at the current seller's price or higher than the current seller's price. Please note that this current seller's price is the lowest in the sell queue. If you try to sell lower than the current seller's price (that is, at the current buyer's price or lower), the order will be done at the current buyer's price. It will become a market order.

Limit order to buy means queue to buy at the current buyer's price or lower than the current buyer's price. Please note that this current buyer's price is the highest in the buy queue. If you try to buy higher than the current buyer's price (that is, at the current seller's price or higher), the order will be done at the current seller's price, thus becoming a market order.

Just remember, for limit order, you cannot queue to buy higher than the seller's price. Likewise, you cannot queue to sell lower than buyer's price in limit order.

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