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LESSON 2 / Markets

How a trade reaches the market

A price on a screen and a completed transaction are different things. Understanding execution helps you ask better questions before using a brokerage platform.

Quotes describe available interest

A bid is a price at which a participant is prepared to buy; an ask is a price at which a participant is prepared to sell. The difference is the spread. Available quantities and quoted prices can change before your order reaches a market.

Price and execution are separate priorities

A market order prioritizes executing promptly at an available price. A limit order places a boundary on the price you will accept, but may remain unfilled. Larger orders can trade at multiple prices when the quantity available at one price is insufficient.

Check the record

An order acknowledgement confirms receipt, not necessarily a fill. Review order status, executed quantity, price, and fees. If you amend or cancel an order, check that the change was accepted before assuming your exposure has changed. Platform procedures and market conditions matter.

Put the idea into practice.

Compare what a market order and a limit order each control. Note which outcome remains uncertain.

Open the practice tool ↗

Check your understanding.

Which outcome does a buy limit order control?

Review the concept

A buy limit sets a price ceiling. Execution is still uncertain.

Original Lyfter education · Updated 2026-11-13. Examples are hypothetical and do not provide a personal investment recommendation.

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