Market vs Limit Orders: How the Price Is Set When You Place an Order

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Before you place an order, decide one thing: do you want it filled now, or only at your price? Market and limit orders are exactly those two choices, and the only difference is which comes first, price or the fill. One thing to say up front: neither order type promises a cheap price and a guaranteed fill at the same time — picking one means trading one for the other.

Market orders: filled now, price not guaranteed

How it fills: a market order fills immediately at the best price available at that moment: buys fill at the ask, sells fill at the bid.
What is not guaranteed: the price. Between the moment you click and the moment it fills, the price can move, so your fill can differ from the latest price you saw — that difference is called slippage.
When slippage is bigger: when the market moves fast, or when the contract's bid-ask spread is wide, slippage can be larger. Near the close, 0DTE options move fast, so a market order's fill can sit noticeably far from the price you were looking at.
When it fits: when getting filled now matters more than a few cents of price — for example, when a position must be closed before the close and cannot be left to settlement.

Limit orders: the price is yours, the fill is not guaranteed

How it fills: a limit order only fills at the price you set, or better. A buy limit fills only at or below your price; a sell limit only at or above it.
What is guaranteed is the price: the fill will not be worse than the price you set — that is the only thing a limit order guarantees.
What is not guaranteed is the fill: if the market never reaches your price, the limit order just keeps waiting, and it may fill only partly, with the rest still waiting. If the market runs away fast, the order may not fill at all that day.
When it fits: when you only want to buy or sell at a certain price and are fine with waiting — for example, when you only want to enter near one level and do not mind missing the trade.

How it works in the simulator

Orders in the simulator fill immediately at the current bid or ask, so they behave like market orders: buys fill at the ask, sells at the bid, and the fill is the chain price at the moment you place the order. The simulator has no limit orders, so practice with market-order logic first: before placing an order, glance at how wide the bid-ask spread is on that strike — every strike in the option chain has a "Spread%" column for calls and puts, and anything over 20% of the premium is marked red. The wider the spread, the more the market-order fill can drift from the mid price you were looking at. When you are starting out, begin with one single-leg long contract and write your exit plan before you open — how much profit to take, how much loss to cut, and what time to exit — all three before entry.

This simulator uses real CBOE option chains delayed about 15 minutes, starts with $10,000 in virtual funds, charges $0.65 per contract per side in fees, and shows P&L net of fees; short-sale margin is a simplified simulated rule at 20% of the strike, not a real broker margin. The simulator is for practicing orders, discipline, and review. It is not investment advice and promises no returns.