Order types

The difference between market, limit and stop orders — and what happens to each in an opening gap.

Disclosure, not advice

The strategies, scores and signals here are produced by an algorithmic system and based on technical data only. They are not investment advice or a substitute for professional advice, we are not investment advisors. Trading involves risk, and every decision and action is solely the user's responsibility.

FoundationsLesson 6 of 344 min

Order types

The order is the tool that turns an idea into a position. The wrong order type can erase the entire edge of a good trade, especially at the open and the close.

The three basics

A market order fills immediately at whatever is available — certain execution, zero price certainty. A limit order fills only at your price or better — certain price, zero execution certainty. A stop order sleeps until price touches a level, then becomes a market order.

There's a hybrid: stop-limit, which converts to a limit rather than a market order. It protects you from a terrible price but creates the opposite, worse risk — in a sharp drop it simply doesn't fill, leaving you in a losing position with no protection.

What happens in an opening gap

A stop is not insurance. If a stock closes at 50 with a stop at 47 and opens next day at 41 on news, the stop triggers and fills near 41 — not 47. That's why holding through a known event, like earnings, is a decision about position size, not only about direction.

When to use which

Entering a liquid name during fast movement — market. Entering a wide-spread name or trading in thin hours — always limit. Exiting a loser — market, because certainty matters more than price. Exiting a winner at a planned target — limit.

A quiet rule that saves money: avoid market orders in the first minute of the session and the last minutes before the close, unless the name is very liquid. Those are the moments when spreads widen and fills are worst.

Terms from this lesson

פקודת שוקMarket Order: Fills immediately at the available price. Certain execution, uncertain price.
פקודת לימיטLimit Order: Fills only at your price or better. May never fill.
פקודת סטופStop Order: A resting order triggered at a level, then sent as a market order.
פקודת סטופ־לימיטStop-Limit Order: A stop that becomes a limit. Protects the price but may not fill at all.
פערGap: An open far from the prior close. Stops fill after it, not at it.

Practical checklist

I picked an order type that matches the name's liquidity
I know a stop does not protect against an opening gap
I avoid market orders in the opening and closing minutes

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