You can use limit orders to buy or sell stocks at a specific price, while market orders allow you to buy or sell at the best available price immediately.
Limit orders
Limit orders allow you to specify the exact price at which you want to trade.
Buy limit order: If a stock's Current Market Price (CMP) is ₹95 and you want to buy at ₹90, place a buy limit order at ₹90. Your order executes at ₹90 or lower.
Sell limit order: If a stock's CMP is ₹95 and you want to sell at ₹100, place a sell limit order at ₹100. Your order executes at ₹100 or higher.
Things to keep in mind
- Orders may partially execute if counterparties aren't available at your specified price and quantity
- Limit orders placed at ₹0 are rejected
- Limit orders can sometimes execute as market orders
- Limit orders remain valid for only 1 day. For longer validity up to 1 year, use Good Till Triggered (GTT) orders.
Market orders
Market orders execute immediately at the best available price. You might buy at a higher price or sell at a lower price than expected.
If you trade an illiquid instrument, your market order executes at the best available price, which could be significantly higher or lower than the Last Traded Price (LTP). To avoid this situation, you can use limit orders as market orders.