Rob Wilson
A limit order only fills at the price you set (or better) — you're prioritising price control. Neither is "better"; the right choice depends on the stock and what matters most to you in that trade.
Once you understand the difference, placing the actual trade takes less than a minute. Here's how both order types work, a worked example in AUD, and the exact steps to place your order.
What is a market order?
A market order is an instruction to buy or sell a share immediately at the best price currently available in the market. You're not naming a price — you're telling your broker "get me in (or out) now."
On the ASX, most market orders are technically executed as market-to-limit orders: your order fills at the best available price, and if there aren't enough shares available at that price to fill your whole order, the remainder sits as a limit order at that price rather than chasing the market further. It's a small technical detail, but it's part of why market orders on liquid stocks tend to fill cleanly at a price very close to what you saw on screen.
Good for: large-cap ASX shares and popular ETFs, where trading volume is high and the gap between the buy and sell price (the spread) is tight.
Watch out for: thinly traded stocks or fast-moving markets (like the first and last few minutes of a trading session), where the price can move between when you click "buy" and when the order fills. This gap is called slippage.
What is a limit order?
A limit order sets the maximum price you're willing to pay (for a buy) or the minimum you're willing to accept (for a sell). Your order will only execute at that price or better — never worse.
Buy limit order: you set a ceiling. If you set a limit of $25.00, your order won't fill above $25.00.
Sell limit order: you set a floor. If you set a limit of $25.00, your order won't fill below $25.00.
Good for: thinly traded or volatile stocks, or whenever you have a specific entry or exit price in mind.
Watch out for: there's no guarantee the market will ever reach your price. Your order can sit unfilled — and if the stock moves away from your limit, you might miss the trade entirely.
Market order vs limit order at a glance
Market order | Limit order | |
|---|---|---|
Execution speed | Fast — fills almost immediately | Only fills if/when your price is reached |
Price certainty | No — you accept the going rate | Yes — fills at your price or better |
Fill certainty | High, for liquid stocks | Not guaranteed |
Best suited to | Large-cap shares, ETFs, when speed matters most | Volatile or thinly traded stocks, when price matters most |
A worked example, in AUD
Say you want to buy $1,000 worth of a fictional stock, ABC Ltd, currently sitting at $10.00.
Market order: your order fills near-instantly. But between clicking "buy" and the order reaching the exchange, the price ticks up to $10.04. You end up paying roughly $4 more than expected on a $1,000 order — a small amount for a liquid stock, but it can be larger during volatile periods.
Limit order at $10.00: if the price is at or below $10.00 when your order reaches the market, it fills at $10.00 or better. If the price jumps straight to $10.10 and never comes back down, your order simply doesn't fill.
Neither outcome is inherently better — it comes down to whether you value certainty of execution or certainty of price more in that moment.
How to actually place a trade
The exact screen will vary a little by broker, but the steps are the same everywhere. On Selfwealth, for example:
Search the stock or ETF. Type the company name or ticker code (e.g., "ABC") into the order screen.
Choose Buy or Sell.
Enter quantity, or a dollar amount if your broker supports it.
Select your order type — Market or Limit. For a limit order, enter your price.
Set an expiry. Most brokers let you choose "day only" (expires if unfilled by the end of the session) or good-till-cancelled/good-till-date, which keeps the order live for a set number of days. Selfwealth also offers good-till-date orders on US shares for exactly this reason.
Review the order. Check the estimated cost, including brokerage — Selfwealth charges a flat $9.50 brokerage per trade regardless of order size or type.
Confirm. You'll get a trade confirmation once it fills, showing price, quantity and fees — worth keeping for tax time.
For the specific mechanics of buying and selling on Selfwealth, see how to buy or sell shares and the full list of order types Selfwealth offers.
Other order types worth knowing
Market and limit orders cover most everyday trading, but two variants are worth knowing:
Stop-loss order: becomes a market order once a stock falls to a price you set — a way to automate an exit rather than watching the screen.
Good-till-date (GTD) order: a limit order that stays active for a set number of days instead of expiring at the end of the trading day.
If you're investing regularly rather than timing individual trades, it's also worth looking at Auto-Invest, which schedules recurring buys automatically — useful if you'd rather dollar-cost average into shares or ETFs than pick order types trade by trade. If you're new to ETFs specifically, this beginner's guide to ETFs is a good next read.
Which order type should you use?
A few rules of thumb:
Trading a large ASX stock or popular ETF? A market order is usually fine — the spread is tight and slippage is typically small.
Trading a smaller or less liquid stock? A limit order gives you control over the price you pay or receive.
Trading near market open or close? Prices can be more volatile in these windows — a limit order adds a layer of protection.
Have a specific entry or exit price in mind? Use a limit order and set an expiry that suits your timeframe.
FAQ
Is a market order or limit order better? Neither is universally better — a market order prioritises speed, a limit order prioritises price. Match the order type to what matters most for that specific trade.
Can a limit order fail to execute? Yes. If the market never reaches your limit price before the order expires, it simply won't fill.
Do market orders cost more in brokerage than limit orders? Not with Selfwealth — brokerage is a flat $9.50 per trade regardless of order type or order size.
What happens if I don't set an expiry on my order? Most brokers default to "day only," meaning an unfilled order expires at the end of that trading session unless you choose a longer-dated option.
Are market orders on the ASX really guaranteed to fill at the displayed price? Not exactly — ASX market orders are generally executed as market-to-limit orders, filling at the best available price, with any unfilled portion sitting as a limit order rather than chasing the price further.
What's the difference between a limit order and a stop-loss order? A limit order sets a price you want to buy or sell at. A stop-loss order typically becomes a market order once the market hits a price you've set, and is often used to manage downside risk rather than to enter a position.
Important disclaimer: SelfWealth Pty Ltd ABN 52 154 324 428 (“Selfwealth”) (AFSL 421789). The information contained on this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser and/or accountant. Taxation, legal and other matters referred to on this website are of a general nature only and should not be relied upon in place of appropriate professional advice. You should obtain the relevant Product Disclosure Statement for any product mentioned and consider its contents before making any decision.
Most Recent Articles
