A Market / Limit Order refers to the two most common types of orders used by traders to buy or sell cryptocurrency on an exchange.

Price vs. Speed: The Key Difference

The choice between a market-order and a limit-order depends on a trader's priority: speed or price.

A market order is an instruction to buy or sell an asset immediately at the best available price on the market. It prioritizes speed and guarantees the trade will be executed. However, it does not guarantee a specific price. In a highly volatile or illiquid market, a market order can result in significant slippage, where the executed price is much different from the expected price. A market order is often placed by a "taker" and incurs a higher fee.

A limit order is an instruction to buy or sell an asset at a specific price or better. It prioritizes price over speed. The order is placed on the exchange's order book and waits to be filled only when the market price reaches the specified limit. There is no guarantee that the order will ever be filled. A limit-order is often placed by a "maker" and incurs a lower fee.

How to Choose Your Order Type

Choosing the right order type depends on your strategy. If you need to execute a trade immediately, regardless of the price, a market order is the best choice. If you want to ensure you get a specific price and are willing to wait, a limit order is the better option. For new traders, using a limit-order can be a good way to control your costs and avoid unexpected slippage.