When an investor places an order to buy or sell an optoin, there are two fundamental execution options: place the order “at the market” or “at the limit.” market orders are transactions meant to execute as quickly as possible at the present or market price. Conversely, a limit order sets the maximum or minimum price at which you are willing to buy or sell.

A market order deals with the execution of the order; the price of the security is secondary to the speed of completing the trade. Limit orders deal primarily with the price; if the security’s value is currently resting outside of the parameters set in the limit order, the transaction does not occur.