{"id":1812,"date":"2019-09-12T13:33:00","date_gmt":"2019-09-12T13:33:00","guid":{"rendered":"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=1812"},"modified":"2025-12-15T14:45:09","modified_gmt":"2025-12-15T14:45:09","slug":"market-orders-vs-limit-orders","status":"publish","type":"post","link":"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-orders-vs-limit-orders\/","title":{"rendered":"Market Orders vs. Limit Orders"},"content":{"rendered":"\n<script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"VideoObject\",\n  \"name\": \"Market Organization and Structure (2025 Level I CFA\u00ae Exam \u2013 Equity \u2013 Module 1)\",\n  \"description\": \"This video lesson covers the fundamentals of the financial system, including its core functions, types of financial instruments, market classifications, roles of intermediaries, and investor positions. It also explores trading mechanisms, margin calculations, order types, market structures, regulatory objectives, and the characteristics of an efficient financial system.\",\n  \"uploadDate\": \"2022-05-05T00:00:00+00:00\",\n  \"thumbnailUrl\": \"https:\/\/i.ytimg.com\/vi\/LFJYcV5EL-w\/hqdefault.jpg\",\n  \"contentUrl\": \"https:\/\/www.youtube.com\/watch?v=LFJYcV5EL-w\",\n  \"embedUrl\": \"https:\/\/www.youtube.com\/embed\/LFJYcV5EL-w\",\n  \"duration\": \"PT57M36S\"\n}\n<\/script>\n<script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"QAPage\",\n  \"mainEntity\": {\n    \"@type\": \"Question\",\n    \"name\": \"If a trader had submitted a buy order for a single GOOG share at market open on December 14, 2016, which order would most likely result in the best one-day return?\",\n    \"text\": \"Alphabet Inc. (GOOG)\\nDecember 14, 2016\\nOpen: $797.40\\nHigh: $804.00\\nLow: $794.01\\nClose: $797.07\\n\\nIf a trader had submitted a buy order for a single GOOG share at market open, what order would most likely result in the best one-day return?\\n\\nA. Market order.\\nB. Limit order at $793.\\nC. Limit order at $795.\",\n    \"answerCount\": 1,\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"The correct answer is C. A limit buy order at $795 would be filled as the price dropped to a low of $794.01, giving the trader a small unrealized gain at market close. A limit order at $793 would not be executed, while a market order would likely execute around $797.40, ending the day with a small loss.\"\n    }\n  }\n}\n<\/script>\n\n\n\n<iframe loading=\"lazy\" width=\"560\" height=\"315\" src=\"https:\/\/www.youtube.com\/embed\/LFJYcV5EL-w?si=LsF9kSloUKru3FU2\" title=\"YouTube video player\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n\n\n<p><\/p>\n\n\n<p>Market orders obtain the best price being offered in the market, so traders submitting marker orders are simply taking the market price. Limit orders will only buy below or sell above a given price. Suppose a trader\u2019s limit order specifies a price between the bid and offer prices. In that case, that trader is considered to make the market as other market participants may accept the better price being offered.<\/p>\n<blockquote>\n<h3><strong>Question<\/strong><\/h3>\n<p>$$<br>\\begin{array}{l|r}<br>\\text{Alphabet Inc. (GOOG)} &amp; \\text{December 14, 2016} \\\\<br>\\hline<br>\\text{Open} &amp; $797.40 \\\\<br>\\text{High} &amp; $804.00 \\\\<br>\\text{Low} &amp; $794.01 \\\\<br>\\text{Close} &amp; $797.07 \\\\<br>\\end{array}<br>$$<\/p>\n<p>If a trader had submitted a buy order for a single GOOG share at market open, what order would <em>most likely<\/em> result in the best one-day return?<\/p>\n<ol style=\"list-style-type: upper-alpha;\">\n<li>Market order.<\/li>\n<li>Limit order at $793.<\/li>\n<li>Limit order at $795.<\/li>\n<\/ol>\n<p><strong>Solution<\/strong><\/p>\n<p>The correct answer is <strong>C<\/strong>.<\/p>\n<p>The limit buy order at $795 would be filled as the price dropped to a $794.01 low, and the trader would have a small unrealized gain at market close, but the limit buy order at $793 would not be executed and thus result in neither a gain nor loss as no transaction would take place. At the beginning of the day, the market order would likely result in a purchase of the GOOG share at about $797.40, and the trader would end the day with a small loss.<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>Market orders obtain the best price being offered in the market, so traders submitting marker orders are simply taking the market price. Limit orders will only buy below or sell above a given price. Suppose a trader\u2019s limit order specifies&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-1812","post","type-post","status-publish","format-standard","hentry","category-equity","blog-post","no-post-thumbnail","animate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Market vs. Limit Orders | CFA Level 1 - AnalystPrep<\/title>\n<meta name=\"description\" content=\"Understand the key differences between market and limit orders, including execution speed, price control, and trading strategies.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/equity\/market-orders-vs-limit-orders\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Market vs. Limit Orders | CFA Level 1 - 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