How do market orders differ from stop and limit orders?
There are differences between market orders, stop orders and limit orders. With market orders, traders do not have any control over the price at which their order is filled; the market order will be filled at the current market price. It is important to note that this could be different from the indicative prices visible when placing the order due to slippage.
With stop orders (stops), traders can decide to execute a trade if the market reaches a level that is less favourable than the current market price. This can be a useful risk management tool as it can minimise losses on a trade. However, non-guaranteed stops can also be subject to slippage.*
A stop order is the opposite of a limit order. With limit orders (limits), traders can decide to buy or sell an asset at a more favourable price than the current market price. They are often used to lock in profits.
Read more about stops and limits in this guide