What are limit and market orders?

Limit and market orders are the two fundamental order types used by traders to specify how and when they wish to execute a stock trade.

Limit orders: You can specify the precise price at which you wish to trade by using limit orders.

Buy limit order: If the stock's Current Market Price (CMP) is ₹95 and you want to buy at ₹90, place a buy limit order at ₹90. Your order will be executed at ₹90 or a lower price.

Sell limit order: If the stock's CMP is ₹95 and you want to sell at ₹100, place a sell limit order at ₹100. Your order will be executed at ₹100 or a higher price.

Market orders

A market order is a type of order placed by a trader to buy or sell a stock immediately at the current market price. It guarantees that the order will be executed, but the exact price at which the order will be filled is not guaranteed, as it depends on the market conditions at the time of execution.