MARKET VS. LIMIT ORDER - WHAT IS THE DIFFERENCE?

from fool.com

If you place a market order, you're essentially asking your broker to buy or sell a given security as soon as possible, at the best available price. This is the most common kind of order, and the simplest.

With a limit order, you state your desire to buy this or that, but only at a certain or better price. So if you place a limit order to buy 50 shares of the Home Surgery Kits Co. (Ticker: OUCHH) at $45, and the stock is trading around $48, your order won't be filled until or unless the stock falls to $45 (or lower).

It depends ...
For many trades, market orders are good enough. If you know you want to own shares of a certain company fairly soon, it's trading at a price you're comfortable with, and it's not a very volatile stock, a market order should serve you well.

You might use a limit order if you want to own a certain stock but think it's overvalued now. If so, you could set a lower "limit" at which you'll buy. If it reaches that limit, you'll buy the stock. If not, your order would expire unfilled. This is one of the downsides of limit orders: Sometimes you just don't get the stock you wanted.

"If you are buying a stock like IBM (NYSE: IBM), then market is the way to go. If you are buying a small-cap that trades only a few shares a day, then put in a limit or you might get a really bad price."