Market, limit, and stop orders are the three most commonly used order types. Each of them has its own distinctive features.

A market order is an order to buy or sell a stock at the best available price. It has the best chance of filling, but the filling price is not certain. A limit order is an order to trade a security at a specified price or better. It guarantees the filling price, but it is not guaranteed to be filled. A stop order, also called a stop-loss order, is an order to trade a security when it has reached above or below a specified price. It is triggered at the stop price and filled as a market order.

To sum up:

• Market orders work best for investors who want their orders to fill immediately and do not intend to control the filling price.
• Limit orders allow investors to set a price they wish to fill at. However, the execution of the order is not guaranteed, since it is not known where the stock price will go.
• Stop orders allow investors to trade until the stock price reaches a specific level. However, once the order is triggered and turns into a market order, the order can be filled at a much higher price than anticipated.