What Is the Primary Difference between a “Market Order” and a “Stop Order”?
A market order is an instruction to buy or sell immediately at the best available current price, prioritizing speed over price certainty. A stop order is an order that becomes a market order (or sometimes a limit order) only when the asset's price reaches a specified "stop price." The market order guarantees execution, while the stop order is used for risk management or triggering trades at certain price levels.
Glossar
Market Order
Execution ⎊ A market order represents an instruction to execute a trade immediately at the best available price within the prevailing order book, irrespective of a specific price point.
Order
Execution ⎊ An order, within cryptocurrency, options, and derivatives, represents a conditional instruction communicated to an exchange or trading venue to buy or sell an asset at a specified price or under defined parameters.
Stop Order
Trigger ⎊ A stop order, within cryptocurrency, options, and derivatives markets, represents a conditional instruction to execute a trade when the market price reaches a specified level; it functions as a risk management tool, automating trade execution based on pre-defined price thresholds.