Limit Order:Simply defined, a limit order is when you set limits on your buy or sell orders. It lets an investor place an order for a certain number of shares at a certain price. For example, if a stock is trading at ₹50 and an investor wishes to acquire 100 shares at ₹45, they can use a limit order.
The moment that stock hits ₹45, the order to buy 100 shares at ₹45 will be executed. Basically, putting a limit on the price of the stock you want to buy is what “limit order” means. While selling, if an investor puts in a limit order at a certain price, the stock will not be sold for less than that price.
Stop loss order:A Stop-loss order is a function that helps an investor to limit the losses in case the trade is going against their predictions and expectations. For example: if an investor buys a stock at Rs 100, he/she can put a stop-loss order at a lower price to prevent heavy losses.
Market Order: In simple words, a market order means buying or selling the stock at whatever price the market has to offer rather than the price of the investor’s choice. Let’s take an example to understand market order. Investor P wants to buy 100 shares of Company L at ₹50 each. The investor places the order. However, by the time it gets executed by the stock exchange, the prices could have changed, and the investor will get the current prevailing price. The price can be more or less than the price that the investor intended to buy the stock. Also, there can be no change in the price at all.
There is not one certain sequence of events that is guaranteed to be ideal for anybody. The appropriate kind of order should be chosen with consideration given to the current state of the market, the trader’s or investor’s requirements, and their level of comfort with taking on risk.
The articles which could help you get detailed information about the order types are mentioned below:
Stop Loss Meaning - Your Savior from a Financial Disaster?
Learn the meaning of stop loss in the stock market, types of stop loss, advantages and disadvantages of stop loss.
Limit Order Meaning - Is it a Bargain Tool at the Stock Market??
Learn What is Limit Order with Example, Advantages & Disadvantages of Limit Order, Limit Order vs. Market Order, and How to place Limit Order in Alice Blue?
What is After Market Order (AMO)? - Can You Trade After Market Closure??
Know all about After Market Order, Its Timings, How Does AMO Work? Its Benefits and How to Place After Market Order in Alice Blue?