Market order vs Limit order- What's the difference?

When I was working in a broking firm I used to get queries from the new investors/traders that "Sir ye market or limit order kya Hota hai?"

So today's blog is on this same topic and I'll explain what's the difference between a Market order and a Limit order.

Let's first understand the market order, for an instance, you went to the market to buy some product and you're like whatever the price is I am ready to pay as I want the product instantly without any delay or hassle.

So now I am assuming you have understood the concept of a market order, now let's take an example in the stock market term. 

The share of ABC is trading at Rs 100 and you want to buy it instantly no matter what price it gets executed. So when you place the market order your order will execute at whatever the best price is available, it can be 100, 101 or can be 103.

Now Limit order, again you gone to the market to buy some product and this time you're like I'll do some bargaining to get the product at a lesser price or my desired price. After negotiating for 10 mins you got the product at your price.

So now I am assuming you have understood the concept of a limit order, now let's take an example in the stock market term. 

The share of XYZ is trading at Rs 500 and you want to buy the share at say Rs 495 so now you will place a limit order, on that trading day If the price comes to Rs 495 then your order will get executed.

Also, there can be a scenario that your order might get executed at a lesser price than your limit price but it won't get executed beyond the mentioned price.

In the above example, 495 was the limit price so your order will execute either on 495 or less than 495 but not more than 495.

Now you know what's the difference between a market order and a limit order ;)

See y'all in the next blog, Cheers!