Understanding the various order types available in financial markets is essential for traders aiming to optimize execution, manage risk, and achieve precise trade control. Whether you're a beginner learning the basics or an experienced trader refining your strategy, selecting the right order type can significantly impact your trading outcomes.
This guide breaks down key order types, order validity options, and order qualifiers, explaining how each functions and when to use them effectively. We’ll also explore real-world scenarios where specific orders provide strategic advantages.
Core Order Types Explained
Limit Order
A limit order allows traders to set a specific price at which they are willing to buy or sell an asset. This order will only execute at the specified limit price—or better.
- For buy limit orders, execution occurs at the limit price or lower.
- For sell limit orders, execution happens at the limit price or higher.
This order type gives traders control over price but not execution certainty—if the market doesn’t reach the limit price, the order may not fill.
👉 Discover how advanced order types can improve your trading precision.
Market Order
A market order executes immediately at the best available current price. It prioritizes speed and certainty of execution over price control.
Because it matches against existing orders in the order book, a large market order may fill at multiple prices, especially in less liquid markets. While execution is nearly guaranteed, slippage can occur during volatile conditions.
Market to Limit Order (MTL)
The Market to Limit Order (MTL) behaves like a market order but with a built-in safety mechanism. It executes at the best available price on the opposite side of the order book—but only at that single price level.
If full execution isn’t possible at that best price, any unfilled portion becomes a limit order at that same price. This helps reduce slippage compared to a standard market order.
Stop Limit Order
A stop limit order uses two price points:
- Trigger price: Activates the order when reached.
- Limit price: Sets the minimum acceptable execution price after activation.
Once the trigger price is hit, the order becomes a limit order and will only execute at the limit price or better. However, there’s no guarantee of execution if liquidity falls short.
Use this order to enter or exit positions with defined parameters while avoiding unpredictable fills.
Stop Market Order
A stop market order also activates when the trigger price is reached—but instead of becoming a limit order, it converts into a market order.
This ensures execution (assuming liquidity exists), but price cannot be controlled post-trigger. Ideal for protecting gains or limiting losses during rapid price movements.
On Open Order
These orders are designed to execute at the market open and include two variants:
- Limit-On-Open (LOO): Becomes a limit order active just before the main trading phase. It either matches at the opening price or converts into a standard limit order, expiring at the end of the first trading session.
- Market-On-Open (MOO): Attempts to match entirely at the opening price. If no match occurs, it expires immediately. Partial fills convert to limit orders at the opening price.
Both must be placed during the pre-opening phase and offer strategic entry points at market open.
On Close Order
Similar to on-open orders, these target execution at market close:
- Market-On-Close (MOC): Converts to a market order during the pre-closing phase. Expires if not fully filled.
- Limit-On-Close (LOC): Converts to a limit order at the closing phase and is subject to last price and static price limits.
These are useful for traders aiming to align with institutional closing activity or index rebalancing.
On Market Married Transaction (OMMT) Order
An OMMT order is a special self-matching structure where both buy and sell sides are submitted simultaneously as a single limit order.
With Fill-and-Kill (FAK) validity:
- If one side executes, the other is automatically canceled.
- It does not interact with external orders in the book.
Commonly used for internal hedging or cross-account transfers without market impact.
One-Cancel-Other (OCO) Order
An OCO order combines two separate orders—typically a limit order and a stop order (either market or limit). Key rules:
- If one leg executes (fully or partially), the other is automatically canceled.
- Manual cancellation of one cancels the other.
- Both must share the same asset, direction (buy/sell), and day-only validity.
For OCO Buy: Limit price < Stop trigger price
For OCO Sell: Limit price > Stop trigger price
This is ideal for setting profit targets and stop-loss levels simultaneously.
Order Validity: How Long Your Order Stays Active
Day Order
A day order remains active only for the current trading session. Any unfilled portion stays in the order book until end-of-day, then cancels automatically.
Perfect for active traders who don’t want stale orders lingering overnight.
Fill and Kill (FAK)
An FAK order requires immediate partial or full execution. Any unmatched quantity is instantly canceled by the system. It never enters the order book queue.
Best for traders seeking quick fills without leaving residual exposure.
Fill or Kill (FOK)
A FOK order demands complete execution immediately—or it’s canceled outright. No partial fills allowed.
Useful when trading large blocks where fragmented execution could move the market.
Bursa Good Till Date (Bursa GTD)
A Bursa GTD order remains active until a specified expiry date (within 30 calendar days of submission). It carries over to subsequent trading days unless filled, canceled, or withdrawn.
Ideal for long-term entry strategies with time-bound objectives.
Modifications allowed only during the Pre-Opening phase at 8:30 AM.
Bursa Good Till Cancel (Bursa GTC)
A Bursa GTC order stays active until fully executed or until it reaches its maximum 30-day lifespan. Like GTD, it rolls forward daily and supports ongoing strategies.
Changes and cancellations are restricted to the 8:30 AM Pre-Opening window.
Order Qualifiers: Enhancing Execution Control
Minimum Quantity
The minimum quantity qualifier ensures that an order executes only if at least a specified volume is available immediately. Otherwise, it’s rejected.
Helps avoid small, inefficient fills and maintains trade size integrity.
Iceberg Order
An iceberg order reveals only a portion of its total size—the "visible quantity"—in the order book. Once that portion fills, another slice appears, maintaining discretion.
Key features:
- Minimum visible quantity: 10% of total order size
- Example: A 100,000-unit iceberg can show between 10,000 and 100,000 units
- Each replenishment resets time priority in the queue
Used by institutional traders to minimize market impact when executing large orders.
During auction phases (e.g., Pre-Opening), the full quantity contributes to theoretical price calculations.
👉 Learn how iceberg orders help maintain trading discretion in volatile markets.
Frequently Asked Questions (FAQ)
Q: What’s the difference between a stop market and stop limit order?
A: A stop market becomes a market order when triggered—guaranteeing execution but not price. A stop limit becomes a limit order upon trigger—offering price control but risking non-execution.
Q: When should I use a Day Order vs. a GTC?
A: Use Day Orders for short-term strategies within one session. Choose GTC if you're waiting for a specific price level over several days.
Q: Can I modify an Iceberg Order after submission?
A: Yes, but only during designated periods like the Pre-Opening phase, depending on exchange rules.
Q: Do OCO orders work with different assets?
A: No—both legs of an OCO must involve the same stock and trade direction.
Q: Why use an MTL instead of a regular market order?
A: MTL reduces slippage by executing at one price level first, turning leftovers into a limit order rather than chasing multiple levels.
Q: Are On-Close orders guaranteed to execute?
A: No—MOC orders may expire unfilled if liquidity is insufficient at closing prices; LOC orders convert to limit orders but still depend on matching interest.
Understanding these order types, validity settings, and execution qualifiers empowers traders to design more effective, disciplined strategies. From precise entries with limit orders to risk management via stop mechanisms, each tool serves a unique role in modern trading workflows.
👉 Master your trading toolkit with intelligent order execution strategies today.