S1 E10 : TYPES OF MARKET ORDERS (MARKET, LIMIT, SL, SL-M)
🤔 Quick Question:
Let’s say you want to buy 1 share of Infosys.
Now you open your app and it asks:
“Choose order type: Market / Limit / SL / SL-M”
You pause and think:
“Why are there types of orders? Isn’t buying just… buying?”
Great question. Let's make it super simple. 👇
🎯 What is an Order in the Stock Market?
An order is a message you send to the stock market saying:
"I want to buy or sell this stock — but only under certain rules."
Those rules = Order Type
Different order types give you control over how and when your trade happens.
🛒 1. Market Order (Buy or Sell Immediately)
This is the default and fastest type.
"Buy me the stock at the current price, right now."
"Sell my stock immediately, at the best price available."
✅ Best For:
- Beginners
- When you just want to enter or exit quickly
- Stocks with high trading volume (like Reliance, TCS)
⚠️ Be Careful:
If the stock is volatile (price changing fast), your actual price might differ slightly.
🎯 2. Limit Order (Set Your Own Price)
This is like telling the app:
"I’ll only buy this stock if it comes to ₹X."
Or, "I’ll sell it only if someone pays ₹Y."
Example:
Infosys is trading at ₹1,500
You want to buy only if it drops to ₹1,480
→ Place a Buy Limit Order at ₹1,480
It will stay pending until price hits ₹1,480.
✅ Best For:
- Saving money on entry
- Not chasing fast-moving stocks
- Selling at target prices
🛡️ 3. Stop Loss Order (SL)
This is your safety shield.
It tells the app:
"If my stock drops to a danger price, sell it automatically to cut losses."
Example:
You bought Tata Motors at ₹800
You set an SL Sell Order at ₹780
If price hits ₹780, it will trigger a sell — saving you from bigger losses.
✅ Best For:
- Traders
- Risk control
- Volatile stocks
🔐 4. SL-M (Stop Loss – Market Order)
This is similar to SL, but even faster.
"If my danger price is hit, don’t wait for a fixed price, just sell immediately."
Example:
Stock drops to ₹780
Instead of waiting to match a ₹780 price, it sells at whatever best price is available instantly.
✅ Best For:
- Fast-moving markets
- Avoiding SL getting skipped
- Emergency exits
🧠 Quick Recap
📑 Order Types in Trading (Explained Simply)
1. Market Order
➡️ You buy or sell at the current market price.
✅ Best when you want quick execution without waiting.
2. Limit Order
➡️ You set your own price to buy or sell.
🎯 Useful when you want control and are okay waiting.
3. SL (Stop Loss)
➡️ You set a danger price — if the stock hits it, it sells automatically.
⚠️ Helps protect you from big losses.
4. SL-M (Stop Loss Market)
➡️ Similar to SL, but it sells at any available price once your danger level is hit.
🛑 Best for fast risk control in sudden crashes.
✅ Final Thought
Order types are like seatbelts, brakes, and gears.
They give you control, safety, and strategy while driving through the stock market.