Market and Limit Orders: Controlling How a Trade Executes
The instruction attached to a trade can matter as much as the investment selected. A market order prioritizes execution, while a limit order sets a price condition that may leave the order unfilled. Understanding those choices helps you balance price control against the desire to complete a transaction, especially when a security is moving quickly or trading less actively than usual.
Adapted from educational material published by the U.S. Securities and Exchange Commission; source publication or review date: August 18, 2026. Fynoptic has edited and organized the material; additional references used for updates are listed below.
Updated August 18, 2026
The following general descriptions represent some of the common order types and trading instructions that investors may use to buy and sell stocks. Please note, order types and trading instructions available to you may differ based on the brokerage firm. Some brokerage firms may not offer some of the order types and trading instructions described below. Also, some brokerage firms may offer order types with similar names with important differences. The list of order types and trading instructions described below is not complete, and you should contact your brokerage firm to determine (1) the availability of order types and trading instructions and (2) specific policies regarding the use of these order types and trading instructions.
Market and limit orders
Market Order
A market order is an order to buy or sell a stock at the best available price. Generally, a market order will be executed immediately. However, the price at which a market order will be executed is not guaranteed. It is important for investors to remember that the last-traded price is not necessarily the price at which a market order will be executed. The price at which a market order will execute often deviates from the last-traded price or “real time” quote due to the demand for a stock and the prices of available liquidity at the time of execution.
Example: An investor places a market order to buy 1000 shares of XYZ stock when the best offer price is $3.00 per share. If other orders are executed first, the investor’s market order may be executed at a higher price.
In addition, parts of a large market order may execute at different prices due to lack of liquidity at a price at the time of execution.
Example: An investor places a market order to buy 1000 shares of XYZ stock at $3.00 per share. The order could have 500 shares execute at $3.00 per share and the other 500 shares execute at a higher price.
Limit Order
A limit order is an order to buy or sell a stock at a specific price or better. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher.
Example: An investor wants to purchase shares of ABC stock for no more than $10. The investor could submit a limit order for this amount and this order will only execute if the price of ABC stock is $10 or lower.
A limit order is not guaranteed to execute. A limit order can only be filled if the stock’s market price reaches the limit price. While limit orders do not guarantee execution, they do help ensure that an investor does not pay more than a pre-determined price for a stock.
Stop, stop-limit, and trailing stop orders introduce a separate trigger price. Their risks are covered in Stop Orders: Why a Trigger Price Is Not a Guarantee.
TIMING RESTRICTIONS AND TRADING INSTRUCTIONS
Market, limit and the various stop orders may include timing restrictions and other trading instructions. The following is a list of common timing restrictions and trading instructions.
Day
Unless an investor specifies a time frame for the expiration of an order, orders to buy and sell a stock are “Day” orders, meaning they are good only during the trading day that the order is entered. Day orders, if not executed, generally cancel at the end of regular trading hours of the trading day that they are entered and will not carry over to the extended hours session or the next trading day.
Good-Til-Canceled (GTC)
A GTC order is an order to buy or sell a stock that lasts until it is executed in full or it is canceled. Depending on the brokerage firm, investors may be able to automatically cancel an order at a specific day and time. Similarly, the time limit that an investor can leave a GTC order open may vary based on the brokerage firm. Investors should contact their brokerage firms to determine the time limits that would apply to GTC orders.
Immediate-Or-Cancel (IOC)
An IOC order is an order to buy or sell a stock that must be executed immediately. Any portion of the order that cannot be filled immediately will be canceled.
Fill-Or-Kill (FOK)
An FOK order is an order to buy or sell a stock that must be executed immediately in its entirety; otherwise, the entire order will be canceled(i.e., no partial execution of the order is allowed).
All-Or-None (AON)
An AON order is an order to buy or sell a stock that must be executed in its entirety, or not executed at all. However, unlike the FOK order, an AON order that is not executed immediately will remain active until it is executed or it is canceled.
On Open
A market or limit order that must be executed when the market opens or re-opens. Any balance not executed as part of the opening trade is canceled.
On Close
A market or limit order that must be executed at the closing price. Any balance not executed as part of the closing trade is canceled.
Additional Resources
For additional information relating to the types of orders investors may use to buy or sell stock or how the markets work in general, please review our “How the Markets Work” webpage on Investor.gov.
Investor Bulletin: Stop, Stop-limit, and Trailing Stop Orders
Call OIEA at 1-800-732-0330, ask a question using this online form, or email us at Help@SEC.gov.
Visit Investor.gov, the SEC’s website for individual investors.
Before you decide
Before submitting an order, confirm the security, direction, quantity, price condition, and duration. Consider what you would prefer if the market moved suddenly: execution at an uncertain price or the possibility of no trade.
Sources and further reading
- Understanding Order Types – Investor Bulletin — U.S. Securities and Exchange Commission; August 18, 2026.
The cited U.S. government source text is in the public domain. Sources were accessed October 27, 2026. Fynoptic is independent and is not endorsed by the agencies. Consult the linked sources for subsequent updates.