What are market orders and limit orders and how do these work?

market orders are executed at the current price of an asset this type of order guarantees that the order will get executed, but does not guarantee the execution price a market order generally will execute at or near the current bid ( for a sell order ) or ask ( for a buy order ) price for example, let's assume bid ask prices of $100 and $105, respectively there are 10 contracts made available at the ask thus, in case a market order to buy 15 contracts is placed, only the first 10 contracts will be executed at $105 limit orders on the other hand, execute at a certain price determined by the trader for limit orders, a trader sets a price and when the asset reaches that price, it gets filled now, limit orders are not guaranteed to filled however, it may provide the trader with a better price to buys and sell for example, s uppose the bid ask prices are $100 and $105, respectively a trader analyses the market and decides that the price could go as low as $95, so they place a limit buy order at $95 once the asset hits that price, the order gets filled immediately, giving trader a better price than if they had placed a market order at $105 the same applies for a sell order if a trader believes the market will go higher than $105, they may place a limit sell order at $120 rather than selling at the current market price again, the downsides to limit orders is that assets aren't guaranteed to reach pre determined price targets as such, unrealistic expectations may lead to missed trading opportunities