Limit Orders vs Market Orders

When buying or selling shares, there are two primary types of orders to choose from: Limit and Market orders. These order types define the pricing conditions under which your trade will be placed.

Limit Orders vs Market Orders Illustration

Limit Orders

Limit orders allow you to set a maximum or minimum price at which you are willing to buy or sell a stock.

  • For a buy limit order, the order will only be executed at the limit price or lower.
  • For a sell limit order, the order will only be executed at the limit price or higher.

This ensures that you don't pay more or receive less than your specified price, noting that your order may not be completed if the market moves away from that price.

When placing a limit order, you have two options:

  • Specify the number of units you want to buy or sell (e.g., 500 units of BHP), or
  • Specify the total trade value you’re willing to buy or sell (e.g., $1,000, excluding GST).
Limit Orders - Graph
Market to Limit Orders - Graph

Market Orders

Market orders are also known as ‘At Market’ and ‘Market to Limit’ orders in Australian markets. They are instructions to buy or sell shares at the best available price at the time, without specifying a specific price. These types of transactions generally execute faster as you are instructing that the order can be placed to execute at the current market price. Market orders can only execute during regular trading hours, not during pre-market or after-hours sessions.

If not executed in full immediately, the order may convert to a limit order for any unfilled portion after an initial execution. They are placed at the best available price during market trading hours; starting as market orders, but if not fully executed, the remaining balance will convert to a limit order and rest on ASX TradeMatch until filled, amended, purged or cancelled. Please note that there is no guarantee the order will be executed.


If your original order has only partially filled and the unfilled portion is resting on ASX TradeMatch, you can amend the order in your order pad to an ‘At Market’ order to resubmit the remaining volume to the market, which will then consider the best available price at that time. Any remaining unfilled portion of the second or subsequent amendment will convert to a limit order and rest on ASX TradeMatch until the order is filled, amended, expired/purged or cancelled.

Note: The price shown in the market depth at the time of placing your order is not guaranteed and may differ from the actual execution price.

Comparison

  Limit Order Market / Market to Limit Order

What price will my order will execute at?

Buys – You set the maximum price you're willing to pay per unit. If your price is below the current market price, the order will remain open until it can be matched, or the order is filled, amended, purged or cancelled.

Sells  – You set the minimum price you're willing to accept per unit. If your price is above the current market price, the order will stay open until a buyer meets your price, or the order is filled, amended, purged or cancelled.

Buys – will enter the market at the best available price at the time. If the order only partially executes, the remaining unexecuted units will rest on ASX TradeMatch.

Sells  – will enter the market at the best available price at the time. If the order only partially executes, the remaining unexecuted units will rest on ASX TradeMatch.

Can I set a total dollar value or do I need to provide a quantity of units?

Placing a limit order will allow you to either:

  • enter the quantity (total number of units) you would like to buy or sell. e.g. 500 units of BHP. Please note there is a minimum value per trade of $500 OR
  • enter the dollar amount (excl. GST) you are willing to buy or sell

You can only place the order by specifying the number of units you wish to buy or sell.

Can I cancel or amend the order?

Yes, as long as the order hasn’t been fully filled and the market is currently accepting changes.

Yes, as long as the order hasn’t been fully filled and the market is currently accepting changes.

When can I place this order?

Anytime - If you place an order outside of market hours it will automatically be placed into the market at open on the next trading day (provided the conditions are met).

During Trading hours - As the order is requested to be filled at the best available price at the time, the order can only be submitted during normal market hours.

Please refer to the ASX cash market trading hours page for a breakdown for the phases.
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This information is intended to provide information for educational purposes only and is subject to change at anytime without notice.