How does a limit order work for a credit spread?
As you probably know, a credit spread involves buying a call (or put) at one strike and selling another call (or put) at another with the same maturity, so you're dealing with two orders. Your broker will likely have to fill this order themselves, meaning that they'll have to look at the existing bid/asks for the different strikes and wait until the difference matches (or exceeds) your limit order.  Obviously they can't place limit orders on the legs individually since they can't guarantee that they will both be executed.  They also don't care what the individual prices are; they just care what the difference is.  It's possible that they have computer systems that examine existing bids and asks that would fill your order, but it's still done by the broker, not the exchange.  The exchange never sees your actual limit order; they will just see the market orders placed by your broker.
It depends on the sequence in which the order [bid and ask] were placed. Please read the below question to understand how the order are matched. How do exchanges match limit orders? Firstly what are you trading that you could lose more than you put in? If you are simply trading stocks you will not lose more than you put in, unless you are trading on margin. A limit order is basically that, a limit on the maximum price you want your buy order bought at or the minimum price you want your sell order sold at. If you can't be glued to the screen all day when you place a limit order, and the market moves the opposite way, you may miss out on your order being executed. Even if you can be in front of the screen all day, you then have to decide if you want to chase the market of miss out on your purchase or sale. For example, if a stock is trading at $10.10 and you put a limit buy order to buy 1000 shares at or below $10.00 and the price keeps moving up to $10.20, then $10.30 and then $10.50, until it closes the day at $11.00. You then have the choice during the day to miss out on buying the shares or to increase your limit order in order to buy at a higher price. Sometime if the stock is not very liquid, i.e. it does not trade very often and has low volume, the price may hit $10.00 and you may only have part of your order executed, say 500 out of your 1000 shares were bought. This may mean that you may have to increase the price of your remaining order or be happy with only buying 500 shares instead of 1000. The same can happen when you are selling (but in reverse obviously). With market order, however, you are placing a buy order to buy at the next bid price in the depth or a sell order to sell at the next offer price in the depth. See the market depth table below:  Note that this price depth table is taken before market open so it seems that the stock is somewhat illiquid with a large gap between the first and second prices in the buyers (bid) prices. When the market opened this gap is closed, as WBC is a major Australian bank and is quite liquid. (the table is for demonstration purposes only). If we pretend that the market was currently open and saw the current market depth for WBC as above, you could decide to place a limit sell order to sell 1000 shares at say $29.91. You would sell 100 shares straight away but your remaining 900 sell order will remain at the top of the Sellers list. If other Buyers come in at $29.91 you may get your whole sale completed, however, if no other Buyers place orders above $29.80 and other Sellers come into the market with sell orders below $29.91, your remaining order may never be executed. If instead you placed a market sell order you would immediately sell 100 shares at $29.91 and the remaining 900 shares at $29.80. (so you would be $99 or just over 0.3% worse off than if you were able to sell the full 1000 shares at $29.91). The question is how low would you have had to lower your limit order price if the price for WBC kept on falling and you had to sell that day? There are risks with whichever type of order you use. You need to determine what the purpose of your order is. Is it to get in or out of the market as soon as possible with the possibility of giving a little bit back to the market? Or is it to get the price you want no matter how long it takes you? That is you are willing to miss out on buying the shares (can miss out on a good buy if the price keeps rising for weeks or months or even years) or you are willing to miss out on selling them right now and can wait for the price to come back up to the price you were willing to sell at (where you may miss out on selling the shares at a good price and they keep on falling and you give back all your profits and more). Just before the onset of the GFC I sold some shares (which I had bought a few years earlier at $3.40) through a market order for $5.96. It had traded just above $6 a few days earlier, but if instead of a market order I had placed a limit order to sell at $6.00 or more I would have missed out on the sale. The price never went back up  to $6 or above, and the following week it started dropping very quickly. It is now trading at about $1.30 and has never gone back above $2.00 (5.5 years later). So to me placing a limit order in this case was very risky. Traders sometimes look at the depth of the book (number of outstanding limit orders) to try and gauge the sentiment of the market or otherwise use this information to formulate their strategy.  If there was a large outstanding buy order at $49.50, there's a decent chance this could increase the price by influencing other traders. However, a limit order at $2 is like an amazon.com price of $200,000 for a book.  It's so far away from realistic that it is ignored.  People would think it is an error. Submitting this type of order is perfectly legal.  If the stock is extremely thinly traded, it might even be encouraged because if someone wanted to sell a bunch and did a really bad job of it, the price could conceivably fall that far and the limit order would be adding liquidity.  I guess.  Your example is pretty extreme. It is not uncommon for there to be limit orders on the book that are not very close to the trading price.  They just sit around.  The majority of trades are done by algorithmic traders and institutional traders and they don't tend to do this, but a retail investor may choose to submit an order like that, just hoping against hope. Also, buy orders are not likely to push prices down, no matter what their price is.  A sell order, yes (even if it isn't executed). The spread is two trades, one of which opens up some risk one of which limits/cancels the risk.  There is nothing stopping you from selling part of the spread opening the door to the risk.  You're required to have a margin account to open risky positions, even if the specific spread trade you're attempting to open has a risk limiting/cancelling counterpart. TD will only sell the stock for you if there's a buyer. There was a buyer, for at least one transaction of at least one stock at 96.66. But who said there were more? Obviously, the stocks later fell, i.e.: there were not that many buyers as there were sellers. What I'm saying is that once the stock passed/reached the limit, the order becomes an active order. But it doesn't become the only active order. It is added to the list, and to the bottom of that list. Obviously, in this case, there were not enough buyers to go through the whole list and get to your order, and since it was a limit order - it would only execute with the limit price you put. Once the price went down you got out of luck.  That said, there could of course be a possibility of a system failure. But given the story of the market behavior - it just looks like you miscalculated and lost on a bet. "This is a great question precisely because the answer is so complicated. It means you're starting to think in detail about how orders actually get filled / executed rather than looking at stock prices as a mythical ""the market"". ""The market price"" is a somewhat deceptive term. The price at which bids and asks last crossed & filled is the price that prints. I.e. that is what you see on a market price data feed. ] In reality there is a resting queue of orders at various bids & asks on various exchanges.  (source: Larry Harris. A size of 1 is 1H = 100 shares.) So at first your 1000H order will sweep through the standing queue of fills. Let's say you are trading a low-volume stock. And let's say someone from another brokerage has set a limit order at a ridiculous price. Part of your order may sweep through and part of it get filled at a ridiculously high price. Or maybe either the exchange or your broker / execution mechanism somehow will protect you against the really high fill. (Let's say your broker hired GETCO, who guarantees a certain VWAP.) Also people change their bids & asks in response to what they see others do. Your 1000H size will likely be marked as a human counterparty by certain players. Other players might see that order differently. (Let's say it was a 100 000H size. Maybe people will decide you must know something and decide they want to go the same direction as you rather than take the opportunity to exit. And maybe some super-fast players will weave in and out of the filling process itself.) There is more to it because, what if some of the resting asks are on other venues? What if both you and some of the asks match with someone who uses the same broker as you? Not only do exchange rules come into play, but so do national regulations. tl;dr: You will get filled, with price slippage. If you send in a big buy order, it will sweep through the resting asks but also there are complications." You need to use one of each, so a single order wouldn't cover this:  The stop-loss order could be placed to handle triggering a sell market order if the stock trades at $95 or lower.  If you want, you could use a stop-limit order if you have an exit price in mind should the stock price drop to $95 though that requires setting a price for the stop to execute and then another price for the sell order to execute. The limit sell order could be placed to handle triggering a sell if the stock rises above $105. On the bright side, once either is done the other could be canceled as it isn't applicable anymore. "I am not familiar with this broker, but I believe this is what is going on: When entering combination orders (in this case the purchase of stocks and the writing of a call), it does not make sense to set a limit price on the two ""legs"" of the order separately. In that case it may be possible that one order gets executed, but the other not, for example. Instead you can specify the total amount you are willing to pay (net debit) or receive (net credit) per item. For this particular choice of a ""buy and write"" strategy, a net credit does not make sense as JoeTaxpayer has explained. Hence if you would choose this option, the order would never get executed. For some combinations of options it does make sense however. It is perhaps also good to see where the max gain numbers come from. In the first case, the gain would be maximal if the stock rises to the strike of the call or higher. In that case you would be payed out $2,50 * 100 = $250, but you have paid $1,41*100 for the combination, hence this leaves a profit of $109 (disregarding transaction fees). In the other case you would have been paid $1,41 for the position. Hence in that case the total profit would be ($1,41+$2,50)*100 = $391. But as said, such an order would not be executed. By the way, note that in your screenshot the bid is at 0, so writing a call would not earn you anything at all." You can do FOK on both market and limit orders. Normal market orders will partial fill if you want more shares than are being offered, or if someone pulled their order before you get there and now there are fewer shares than you placed a trade for. With a FOK limit order not at the BBO you are shooting in the dark for a quick match, most of the time it does not fill.  This is a commonly used order type for UHFT arbitrage.  Some exchanges will not attempt to cross it for a match if its price is not at, or better than the market price. When the FOK limit order is at the BBO it is essentially a FOK market order.   FYI: Sometimes you have a minimum quantity to fill option, so you can let the order sit on the book until it fills or you cancel. From the non-authoritative Investopedia page: A stop-limit order will be executed at a specified price, or better, after a given stop price has been reached. Once the stop price is reached, the stop-limit order becomes a limit order to buy or sell at the limit price or better. So once the stop price has been breached, your limit order is placed and will be on the order books as a $9 ask. For a vanilla stop order, a market order will be placed and will be filled using the highest active bid(s). If you want to make sure you pay at or below a specific price per share, use a limit order. If you want to buy the stock close to the current price, but aren't price sensitive, use a market order. Market orders are typically not a great idea because if you're buying thousands or tens of thousands of shares this can mean a large swing in cost if the market suddenly changes direction. In simple terms, this is how the shares are traded, however most of the times market orders are placed. Consider below scenario( hypothetical scenario, there are just 2 traders) Buyer is ready to buy 10 shares @ 5$ and seller is ready to sell 10 shares @ 5.10$, both the orders will remain in open state, unless one wish to change his price, this is an example of limit order. Market orders If seller is ready to sell 10 shares @ 5$ and another 10 shares @5.05$, if buyer wants to buy 20 shares @ market price, then the trade will be executed for 10 shares @ 5$ and another 10 shares @ 5.05$ If you want to buy once the price goes up to $101 or above you can place a conditional order to be triggered at $101 or above and for a limit order to entered to buy at $102. This will mean that as soon as the price reaches $101 or above, your limit order will enter the market and you will buy at any price from $102 or below. So if the price just trickles over $101 you will end up buying at around $101 or just over $101. However, if the price gaps above $101, say it gaps up to $101.50, then you will end up buying at around $101.50. If the price gaps up above $102, say $102.50, then your limit order at $102 will hit the market but it will not trade until the price drops back to $102 or below. "During the day, market and limit orders are submitted at any time by market participants and there is a bid and an ask that move around over time.  Trades occur whenever a market order is submitted or a limit order is submitted that at a price that matches or exceeds an existing limit order.  If you submit a market order, it may consume all best-price limit orders and you can get multiple prices, changing the bid or ask at the same time.  All that stuff happens during the trading day only. What happens at the end of the day is different.  A bunch of orders that were submitted during the day but marked as ""on close"" are aggregated with any outstanding limit orders to create a single closing price according to the algorithm established by the exchange.  Each exchange may handle the details of this closing event differently.  For example, the Nasdaq's closing cross or the NYSE's closing auction. The close is the most liquid time of the day, so investors who are trading large amounts and not interested in intraday swings will often submit a market-on-close or limit-on-close order.  This minimizes their chance of affecting the price or crossing a big spread.  It's actually most relevant for smaller stocks, which may have too little volume during the day to make big trades, but have plenty at the close.  In short, the volume you see is due to these on-close orders. The spike in volume most likely has no special information about what will happen overnight or the next day.  It's probably just a normal part of the market for illiquid stocks." "Correcting Keith's answer (you should have read about these details in the terms and conditions of your bank/broker): Entrustment orders are like a ""soft"" limit order and meaningless without a validity (which is typically between 1 and 5 days). If you buy silver at an entrustment price above market price, say x when the market offer is m, then parts of your order will likely be filled at the market price.  For the remaining quantity there is now a limit, the bank/broker might fill your order over the next 5 days (or however long the validity is) at various prices, such that the overall average price does not exceed x. This is different to a limit order, as it allows the bank/broker to (partially) buy silver at higher prices than x as long as the overall averages is x or less.  In a limit set-up you might be (partially) filled at market prices first, but if the market moves above x the bank/broker will not fill any remaining quantities of your order, so you might end up (after a day or 5 days) with a partially filled order. Also note that an entrustment price below the market price and with a short enough validity behaves like a limit price. The 4th order type is sort of an opposite-side limit price: A stop-buy means buy when the market offer quote goes above a certain price, a stop-sell means sell when the market bid quote goes below a certain price. Paired with the entrusment principle, this might mean that you buy/sell on average above/below the price you give. I don't know how big your orders are or will be but always keep in mind that not all of your order might be filled immediately, a so-called partial fill.  This is particularly noteworthy when you're in a pro-rata market."