When you place a market order, you are instructing the broker to buy at the prevailing offer price or to sell at the prevailing bid price at the time the order is executed on the Australian Stock Exchange.

In most cases, market orders will be executed quickly. So, while there may be a small variation in price between the time you place your order and when it is executed, a market order is usually advisable when you want the transaction to definitely take place.

When you place an order, you must indicate whether it is a limit order or a market order.

Limit orders allow you to set a maximum purchase price for your buy orders, or a minimum sale price for your sell orders. If the market doesn’t reach your limit price, your order will not be executed.

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This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Investors should consult a range of resources, and if necessary, seek professional advice, before making investment decisions in regard to their objectives, financial and taxation situations and needs because these have not been taken into account. Any securities or prices used in the examples given are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance. Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and a Participant of the ASX Group and Chi-X Australia.