Placing an order means answering a question many people discover at the moment of clicking: do you want to guarantee that the trade happens, or guarantee at what price it happens? Both at once do not exist — and each order type picks its side.
The market order
"Buy (or sell) now, at the best available price."
- What it guarantees: execution — the order goes through, as long as there is a counterparty.
- What it does not guarantee: the price. The order takes what the book offers at the moment it arrives — which can differ from the last quote shown, especially if the book is thin or the order is large.
The limit order
"Buy at this price or lower" — or "sell at this price or higher".
- What it guarantees: the price — never worse than the limit set (sometimes better).
- What it does not guarantee: execution. If no one accepts the limit, the order waits — and can expire having done nothing, while the quote moves away.
A neutral worked example
A fictional security shows a last quote of $50.00; the best seller asks $50.10 for 80 shares, the next one $50.40 for 200 shares.
- Market order for 100 shares: 80 fill at $50.10, the remaining 20 at $50.40 — average price $50.16, above the quote shown at the moment of the click. Execution guaranteed, price taken as it comes.
- Limit order at $50.10 for 100 shares: 80 fill at $50.10; the remaining 20 wait for a seller to accept $50.10 — maybe in a minute, maybe never. Price guaranteed, partial fill possible.
Neither one "did better": they kept different promises.
The usual variants
Most brokers offer settings around these two families — time in force (day, until cancelled), partial fills allowed or not. The names vary from one institution to another; the underlying mechanics remain those described here.
What this changes for your tracking
Everyfolio records the completed trade: the quantity and price actually executed, as your statement shows them. The order type that led there does not appear in the tracking — what enters your average-cost calculations is the result, not the intention.
Informative, general content — not personalized advice. For your situation: your institution or an advisor.