Limit vs Market Orders: When to Use Each
A market order buys immediately at whatever price the order book offers, and a limit order buys only at a price you name or better, so the choice is between certainty of execution and certainty of price, and on most exchanges it is also a choice between two different fee rates.
Updated · By RampAtlas Research
Key takeaways
- A market order buys immediately at whatever the order book offers, and a limit order buys only at a price you name or better.
- A market order guarantees execution but not price, and a limit order guarantees price but not execution.
- As of September 2026, Kraken charges 0.40% maker and 0.80% taker at its lowest 30-day volume tier (source: Kraken fee schedule).
- A limit order that rests on the book earns the cheaper maker rate, while one priced to fill immediately pays the taker rate.
- Use a limit order on thin markets and large sizes, where slippage costs more than the risk of not filling.
In this guide
A market order buys immediately at whatever price the order book offers, and a limit order buys only at a price you name or better, so the choice is between certainty of execution and certainty of price, and on most exchanges it is also a choice between two different fee rates.
Nearly every first purchase is a market order, because the buy button is one. Knowing when the other option is better is worth more than any other beginner optimization on an exchange.
What a market order does
A market order instructs the exchange to fill your order now, against whatever is currently resting on the order book. You specify a quantity or an amount of money. You do not specify a price.
It fills against the best available price first, then the next best, and so on until the order is complete. On a deep market and a small order that means one price level and no surprises. On a thin market or a large order it means several levels, and the average price you pay is worse than the one you saw quoted.
Two things are therefore true at once. A market order will always execute, assuming any liquidity exists. And it will execute at a price you did not agree to in advance.
| Market order | Limit order | |
|---|---|---|
| You specify | A quantity or an amount of money | A price and a quantity |
| Execution | Always fills, assuming any liquidity exists | May fill in minutes, fill partially, or never fill |
| Price | Whatever the book offers, level by level | Your named price or better |
| Fee side | Always a taker | Maker if it rests on the book, taker if it fills immediately |
What a limit order does
A limit order sets a ceiling on what you will pay. You name a price and a quantity, and the exchange fills the order only at that price or better.
If your limit price is at or above the best ask, it fills immediately, in whole or in part, exactly like a market order but with a cap on the damage. If your limit price is below the best ask, nothing happens yet. The order joins the book and waits for a seller willing to meet it. It may fill in minutes, it may fill partially, and it may never fill at all.
That is the trade. You control the price and you give up the guarantee.
The fee difference
This is the part that gets left out of most explanations, and on a small purchase it is the largest number involved.
Exchanges price trading through a maker taker fee schedule. An order that rests on the book and waits adds liquidity, and its owner is a maker. An order that fills against something already resting removes liquidity, and its owner is a taker. Takers pay more, because the exchange is paying makers for the depth everyone else trades against.
As of September 2026, Kraken's spot schedule charges 0.40% maker and 0.80% taker at its lowest 30-day volume tier, and charges 1% on instant and recurring trades (source: Kraken fee schedule). On that schedule a resting limit order costs half what a market order costs, and less than half what the simple buy button costs.
0.40%
Kraken maker fee
lowest 30-day volume tier, Kraken fee schedule, September 2026
0.80%
Kraken taker fee
lowest 30-day volume tier, Kraken fee schedule, September 2026
1%
Instant and recurring trades
Kraken fee schedule, September 2026
The important nuance is that limit orders are not automatically cheap. A limit order priced to fill immediately is a taker order and pays the taker rate. What earns the maker rate is resting on the book, which means naming a price the market has not reached yet and being willing to wait.
A cost estimate for a $500 purchase on Kraken, Coinbase Exchange, Gemini and Binance US appears here once the published fee schedules are verified.
When to use a market order
Use one when execution matters more than a small difference in price. Three cases cover most of it.
The purchase is small and the market is deep, so the spread and the slippage are both negligible. You are buying a major asset where the top of the book holds far more than you need. Or you have decided to transact and a partial or missed fill would be worse than paying a few basis points more.
The failure case is the opposite: a market order for a large amount on a thin book. The order walks up through the levels, and the average fill can be materially worse than the quote. That is a self-inflicted cost, and it is entirely avoidable.
When to use a limit order
Use one when the price is uncertain and you are not.
Thin markets are the clearest case. On an asset with a wide spread, the ask you would pay as a taker may sit well above the midpoint, and placing a limit order between the bid and the ask often fills at a better price within minutes. Large orders are the second case, because the arithmetic of depth is what determines your fill. Fast-moving markets are the third: during high volatility the book thins out and the price you see can be gone by the time your order arrives.
A limit order is also the tool for buying at a level you have chosen in advance. Set it, and it either fills at your price or it does not fill. There is no version where you get filled at a price you did not agree to.
The cost of using one is that it may sit unfilled while the market moves away, and an unfilled order is not free of consequence even though it carries no fee.
Two variations worth knowing
Stop orders are conditional instructions rather than a third category. A stop order sits dormant until the market reaches a trigger price, at which point it becomes a market order, or a limit order if it is a stop-limit.
Time-in-force settings control how long an unfilled limit order survives.
| Setting | What it does |
|---|---|
| Good-till-cancelled | Leaves the order on the book until you remove it. |
| Immediate-or-cancel | Fills what it can now and cancels the rest. |
| Fill-or-kill | Requires the entire order to fill at once, or none of it. |
The defaults differ by exchange, and it is worth reading yours once rather than discovering it during a trade.
Where the order type is available
Not every platform offers both. A broker that quotes you a single price and executes against its own inventory usually offers no order book and no limit orders, which means no maker rate is available at any size. Exchanges with a full trading interface offer both, and often price the two products differently on the same account.
Compare what serves your jurisdiction on Buy Bitcoin, read the operator detail on Kraken, Coinbase, and Gemini, and set two venues against each other on Compare. Asset context sits on Bitcoin. How the underlying costs are estimated is on Methodology, and the wider fee picture is in Crypto exchange fees explained.
Frequently Asked Questions
Which order type is cheaper?
A limit order that rests on the book is cheaper, because it earns the maker rate. On Kraken's published schedule that is 0.40% against a 0.80% taker rate at the entry tier. A limit order priced to fill instantly pays the taker rate like any other, so the saving comes from waiting rather than from the order type itself.
Will my limit order definitely fill?
No. If the market never reaches your price, it sits on the book indefinitely, and it can also fill partially and leave the remainder waiting. That uncertainty is the price of controlling the price.
Is the buy button a market order?
Usually it is a market order routed through a simplified product with its own rate, which tends to be higher than the trading interface's taker rate. On Kraken that product is charged at 1% as of September 2026. Where an exchange offers both, using the trading interface for the same purchase is often the single largest saving available.
What happens if I set a limit price above the current ask?
It fills immediately at the best available prices, up to your limit, and you pay the taker rate. Used this way, a limit order is a market order with a cap on how bad the fill can get, which is a reasonable habit on thin markets.
Do I need a limit order for a small purchase?
Not usually. On a deep market a small order fills inside the top of the book, so slippage is close to zero and the only saving on offer is the maker discount. Whether that is worth the wait is a matter of preference.