Limit Order & Market Order - Buying and Selling of stock, Investing in Stock Markets Video Lecture | Investing in Stock Markets - B Com

it's a again welcome to our series for
the new investors and suppose if you're
new in Western you're looking into your
account and now you are wondering why do
I have to type of order option one is
the limit order and one is the market
order so what's the difference between
this and why should I choose one over
another so the idea is so suppose if
you're looking at a stock and the stock
is right now seven hundred point one so
if you're looking at this price this is
what is this price this price is the
last price so the last price at what
price there was a transaction but that
doesn't really mean that this is the
current price so this is not the current
price for which you can buy it so if you
look at the market the market might look
like something like that seven hundred
to sell and seven hundred point two to
buy and you will be wondering why
because there is always a spread
somebody is willing to pay this much or
sell it for this much however there is
another person who is not ready for that
so he's looking for something lower and
force so so this is what is called
spread all right however because the
transactions are going very very fast if
you put a limit order limit means that
you will describe the price so you
describe the price and you say that
okay I want to purchase it at maybe
seven hundred so why would you pay a
seven hundred point two because if you
are wondering if you are thinking that
it it should be seven hundred because
somebody is willing to answer like sell
it for seven hundred right so you are
also want to sell it for seven hundred
and there will be a little bit
fluctuation and your order will go
through it should not be that difficult
but sometimes you the fluctuation if the
the movement is not there the volume is
not there
it can also happen that you'll lose lose
it but it's always not a good idea to
put on the market because when you put
it in a market there could be lot of
fluctuation so there could be if you
look in the market the market might look
like this so there is a 700 then there
is a six ninety nine point nine and then
there is six ninety-nine point eight and
then you have seven hundred point one
seven hundred point two and seven
hundred point three so this is the first
set of people right so maybe five stocks
are available at this price but at this
price there are ten additional stocks
available and then at this price you
have twenty additional stocks available
I'm just making it doesn't have to go up
so I'll let me say it is four again here
and four here or maybe it doesn't have
to be same so I can say five here right
so if you are purchasing maybe ten of
them right so what will happen is that
you will automatically go from here to
here so so you will have to buy some on
this place and some on this place but
because this is changing very fast if
you put a limit order it can go through
but if you put a market price it can it
you will end up purchasing it for seven
hundred point one plus seven hundred
point two and if you're looking at
hundred stocks then you will end up
purchasing the whole range of prices so
you will be and and you will end up
buying this whole thing so your average
price will be higher maybe seventy seven
hundred point two five right however if
you keep a limit price then you will
have five filled up so you will five
Phillip and after some time you will get
five more after some times you get ten
more and slowly you will fill up your
water but if the volumes are very fast
normally that doesn't happen in the
actual markets but for some low volume
stocks that
important criteria so you need to worry
about it so that's the difference
between the limit order or the market
order so market order some anything can
happen
there could be a major price fluctuation
and then you will end up having lost
another thing is that suppose if the
stock is at $700 and you don't want to
buy at 700 you think that I'm going to
wait for 690 maybe so you can always put
a limit order for 619 so when you put a
limit order for 690 the system is going
to wait until this order is fulfilled
right for for order order is filled so
and you can say good till cancer so this
means good till cancelled so that can
last even four months
so your order will be there even if it
takes n days or maybe two months for the
price to be there and you can define
actually the time you want your order to
be there if you want to wait for one
month you can say that I'm I'm ready to
buy the stock for 690 even if it has to
be one month so I hope this helps and
I'll I'll see you later