Order types and what each commits you to

Every button on your platform sends one of three instructions, and each one signs you up for a different bargain. Knowing which certainty you are buying - and which you are giving up - is the difference between an order doing what you meant and an order doing what you said.

What does each order actually promise?

A market order buys certainty of execution: you fill now, at the ask if buying, the bid if selling, and in a fast market at whatever those have become by the time your order lands. A limit order buys certainty of price: it rests at your level and fills there or better - but the market owes it nothing, and it can wait forever unfilled. The trade-off is exact: market orders never miss and never guarantee the price; limit orders never disappoint on price and never guarantee the fill.

A stop order is the hybrid that catches people out. It waits at a level - beyond the current price - and when that level trades, it becomes a market order. The trigger is certain; the fill inherits every market-order property, which is why a stop through a gap fills at the far side, as the last lesson priced. Stops close positions defensively and open breakout positions; either way, the moment they trigger, you are a market order in whatever book exists right then.

What this means for you

Choose the certainty the situation needs. Entering without urgency, a limit costs nothing but patience; exiting a position that is moving against you, the market order's certainty is the one worth paying for. Say what you mean precisely - a stop where you meant a limit buys the opposite bargain. And carry the last lesson with you: a stop's named level is a trigger, never a guaranteed price, so what it costs depends on the book it wakes up in. With the market's machinery now mapped end to end, module 2 turns to reading it.