When buying or selling ETFs through a broker, investors can use a market order or a limit order. A market order is designed to fill immediately at the best available current price. A limit order is designed to fill at a specific price or better, and is not guaranteed to execute at the order price, although that’s not necessarily a bad thing. [Caution: Use Limit Orders with ETFs]
“Most of the complaints about the ETF market are that market orders get screwed,” Stephen O’Grady, who was the partner in charge of ETF trading at Kellogg Capital Markets, said in the article. “Don’t put market orders in, and if you do, be prepared to get a price you’re not happy with.”
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Max Chen contributed to this article.