In the first place, we must remember an order you might place to buy or sell stocks, is your set of instructions directed to a trader on the floor. Your instruction must be clearly understood to eliminate ambiguity and the chance for error in carrying out your transaction. Then too, for the people in the business, such as the broker with whom you place your order, the system for placing orders must be efficient. Think of the number of transactions processed each day, and it clearly makes perfect sense to waste few words in passing on your instructions.

Buy orders are not always a simple order to make a purchase at what ever price the market is asking. It isn’t like walking into your local supermarket, selecting an item on the self and proceeding to the cash register where you pay the posted price. In that scenario, the consumer does not have any choice but to pay the price the seller has stated. In a moving, rapidly changing stock market, buyers and sellers have lots of choices about how they want to carry out a transaction, they know it, and will push to seek what it is they are after.

The simplest order type is a market order. Investors can place an order to buy or sell at market price. As long as there are buyers and sellers active in the specified stock, a buy market order or sell market order will be filled quickly because there are not any conditions which must be met to complete the transaction. The only problem with a market order is that once the order is placed, the buyer or seller loses control of the transaction. He does not know for sure at what price the deal will go through, but he is committed to completing it.  The customer can gain some control over the price at which a trade is to be carried out by placing a limit order.