Investor education

Order Types Explained

An order type tells your broker how you want a trade executed. The choice affects the price you may receive, whether the trade fills at all, and how much control you keep during fast-moving markets. This guide explains the common order types in plain language and lists the details careful investors should confirm in their own broker's documentation, since order handling rules differ between platforms and markets.

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Market and limit orders: the core building blocks

A market order asks the broker to execute immediately at the current available price. It prioritises speed of execution over price certainty, which means the fill price can differ from the last quoted price, especially in thin or volatile markets. A limit order instead sets a maximum price you will pay when buying, or a minimum price you will accept when selling. It gives price control but no guarantee of execution: if the market never reaches your limit, the order simply does not fill. Many investors use limit orders for less liquid securities and market orders for highly liquid ones, but the trade-off between certainty of execution and certainty of price applies in every case.

Market order: fills quickly, but the execution price is not guaranteed.
Limit order: sets your price boundary, but the order may not execute.
Liquidity and volatility change how large the gap between quoted and executed prices can be.
Check how your broker handles partial fills on limit orders before relying on them.

Stop, stop-limit and other conditional orders

A stop order becomes a market order once a trigger price is reached. Investors often use stops to exit a position if it moves against them, but because the order converts to a market order, the actual fill can be worse than the stop price in a fast market. A stop-limit order converts to a limit order at the trigger, which controls the price but reintroduces the risk of no execution. Some platforms also offer trailing stops, which adjust the trigger as the price moves in your favour, and time-in-force settings such as day orders or good-till-cancelled. Availability and exact behaviour of conditional orders vary by broker and by market, so treat any list of order types as something to confirm rather than assume.

Stop orders do not guarantee the stop price; gaps can cause fills well beyond it.
Stop-limit orders control price but can be skipped entirely in sharp moves.
Time-in-force settings determine how long an order stays active.
Order type availability differs by broker, market and instrument.

What to verify in your broker's order handling documents

Before relying on any order type, read the broker's order execution policy and platform documentation directly. Confirm which order types are supported for the specific markets you trade, how orders behave outside regular trading hours, whether stops are held on the broker's servers or on an exchange, and how partial fills and order amendments are treated. If terms in the documents are unfamiliar, check them against the definitions in the Glossary at /glossary, and use the Education hub at /education for related guides. If you are still choosing a platform, the Find my broker workflow at /find-my-broker can help you turn these questions into a structured research checklist.

Read the broker's order execution policy, not just marketing pages.
Confirm behaviour outside regular hours and during halts or gaps.
Ask where stop orders are held and how triggers are calculated.
Keep written notes of what you verified and the date you checked.

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FAQ

Is a limit order always better than a market order?

No. A limit order gives price control but may never execute, while a market order fills quickly at an uncertain price. Which trade-off suits you depends on the security's liquidity, how urgent the trade is, and your tolerance for missing the trade entirely.

Does a stop-loss order guarantee my maximum loss?

No. A standard stop order becomes a market order when triggered, so in a fast or gapping market the fill can be significantly worse than the stop price. A stop-limit order controls the price but may not execute at all. Check your broker's documents for how stops are handled.

Do all brokers offer the same order types?

No. Supported order types, time-in-force options and conditional order behaviour vary between brokers, platforms and markets. Verify what is available for the specific instruments you trade by reading the broker's current platform documentation directly.