The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question – “What’s the difference between a limit and a market order?” The difference between these two orders is very important, especially if you are just getting started trading. Even if you’ve been trading for a while now, you might see these two different order types on your broker dialogue screen before you place the order in the market that you’re trading. And so, the difference is really, what the name sounds like. A limit order sets a specific limited price to whatever contract or shares you’re trading and this is the price that you will not go above or below (depending on what side of the trade you’re on) for any reason. The broker will not execute it if the price of the contracts are higher or lower than your limit price. For example, if I’m going to buy an option contract, I might set a limit price of $152. And so, that means that if the option contract is trading for anythi