The terms "limit order" and "market order" are more than a little bit dated. A limit order is just an order to buy or sell at a specific price or better. It's

The terms "limit order" and "market order" are more than a little bit dated. A limit order is just an order to buy or sell at a specific price or better. It's like going on e-bay and bidding at a specific price, you may or may not get it if there is no one to sell at that price. A market order is to buy or sell right now at the market price no matter what. You may get a terrible price, but you will get the deal done. So let's say you are looking to buy a stock. A limit order puts your bid price on the market and someone can come along and sell it to you at that price, but only after all the higher bids and all the bids at the same price that were entered before yours were executed. The other option is to try to pay the asking price of someone who is trying to sell the stock. Let's say you see an ask at $80.00 and you are willing to pay that price so you put in a market order to buy. But someone could see your order and "front-run" you by buying up all the $80.00 asks and relisting at a higher price so you get stuck with it at that new higher price. The safer option is to try to match that $80.00 ask with a limit order of your own at the same price, but there is a risk that it might not go through if someone beats you to it.