Founder, Underpitch · Source review includes AMFI, SEBI, NSE, RBI, IRDAI, exchange, company or insurer documents where relevant.
2 July 2026
A market order seeks immediate execution at the best available price but does not guarantee the final price. A limit order specifies the maximum buy price or minimum sell price but may not execute. A stop-loss order activates after a trigger is reached; after activation, execution still depends on the selected order type and market liquidity.
Key points
- Market orders prioritise execution, not price certainty.
- Limit orders prioritise price, not execution certainty.
- A stop-loss trigger is not a guaranteed exit price.
- Thin liquidity and price gaps can produce large slippage.
Market orders
A market order enters the order book to trade against the best available opposite orders. In a liquid stock the difference may be small, while a large order or illiquid security can execute across several prices.
Limit orders
A buy limit executes only at the limit price or lower, while a sell limit executes at the limit price or higher. If the market never reaches the price or available quantity is insufficient, the order can remain unfilled.
Stop-loss orders
A stop-loss order stays inactive until the trigger condition is met. Once triggered, a stop-market or stop-limit instruction behaves according to its design. A stop-limit can fail to fill after a fast gap, while a market-based exit can fill far from the trigger.
Worked Indian example
A stock last traded at ₹100. A trader places a sell stop trigger at ₹95 with a limit price of ₹94.50. Bad news causes the next available buyers to appear near ₹90. The trigger activates, but the ₹94.50 limit order may remain unexecuted. The stop controlled activation, not a guaranteed sale.
Comparison table
| Order type | Primary objective | Main limitation |
|---|---|---|
| Market | Fast execution | Final price can differ due to slippage |
| Limit | Price control | Order may remain unexecuted |
| Stop-market | Exit after trigger with execution priority | Price can be much worse after a gap |
| Stop-limit | Trigger plus minimum/maximum acceptable price | May not execute after a sharp move |
| IOC | Immediate full or partial execution | Unfilled quantity is cancelled |
Broker interfaces and permitted order variants can differ. Verify the exchange and broker rules.
Risks and limitations
- Stops can be triggered by short-lived volatility.
- Large orders can move the market in illiquid stocks.
- Exchange protection mechanisms can reject extreme orders.
- Technical failure or connectivity problems can delay action.
Frequently asked questions
Does a stop-loss guarantee the maximum loss?
No. A price gap or poor liquidity can result in a worse exit or no fill for a stop-limit order.
Why did my limit order not execute when the chart touched the price?
Available quantity, queue priority, tick data and the exact traded market can affect execution.
Which order is best?
It depends on whether price certainty or execution certainty matters more in that situation.
What is IOC?
Immediate-or-cancel attempts to execute all or part of an order immediately and cancels the unfilled part.
Sources and methodology
Rules, thresholds and product terms can change. Verify the latest official material and product documents before relying on a figure.
This page is for education and product understanding. It is not a personalised investment, legal, tax, trading or buy/sell recommendation. Stocks, derivatives, PMS and AIFs can result in partial or total capital loss.