Article 5: The Execution — Market vs. Limit Orders
I. The Market Order: "Get Me In Now"
A Market Order is an instruction to buy (or sell) immediately at the best available current price.
How it works: You don’t name a price; you just say, "I want 10 shares of VOO right now." Your broker finds the nearest seller and closes the deal instantly.
The Pro: Speed. It is almost guaranteed to execute immediately. It’s perfect for the "Core" of your portfolio—highly liquid ETFs where the price doesn't swing wildly in seconds.
The Con: Slippage. In the second it takes to click "Buy," the price could jump up a few cents. You are a "price taker."
II. The Limit Order: "The Negotiator"
A Limit Order is an instruction to buy only if the price hits a specific target you set.
How it works: You say, "I want 10 shares of Apple, but I’m only willing to pay $190.00 or less." If Apple is currently $192, your order will sit and wait.
The Pro: Control. You never pay more than you intended. This is the "Safety Valve" that prevents you from buying during a sudden, irrational price spike.
The Con: Non-Execution. If the stock stays at $192 and then shoots up to $200, you never "caught the bus." You saved money on the price but missed out on the gains.
III. The "Cheat Code": Fractional Shares
In the past, if a share of Berkshire Hathaway cost $600,000, you couldn't buy it without $600,000. In 2026, most brokers allow Fractional Shares (or "Slices").
You can choose to buy by Dollar Amount instead of Share Count.
The Move: You type in "$50" into the trade ticket. The broker gives you 0.00008 of a share. This allows you to stay 100% invested without having "loose change" sitting in your account.
IV. When to Use Which? (The Decision Matrix)
Scenario | Recommended Order | Why? |
Buying a massive ETF (VOO/VTI) | Market Order | Spreads are tiny; speed is more important than a $0.01 difference. |
Buying a Volatile Tech Stock | Limit Order | Prices can "flash" up or down; protect yourself from bad timing. |
The Market is Closed (Night) | Limit Order | Prices can "gap" up at the opening bell. Never use a Market order at night. |
Selling in a Panic | Market Order | (Though we don't recommend panicking!) If you must exit, speed is king. |
V. Walkthrough: Your First Trade
Search: Enter the Ticker (e.g., VT).
Action: Select Buy.
Order Type: Select Limit (set it a few cents below the current "Ask" price).
Quantity: Enter your dollar amount or number of shares.
Time in Force: Select Day (the order expires when the market closes today).
Preview & Transmit: Double-check the math and hit "Confirm."
Conclusion
You’ve done it. You are now a partial owner of a global enterprise. The money you earned through labor is now officially Capital—and it’s working for you while you sleep.
But buying is the easy part. The hard part is staying in. In our final article, we’ll discuss how to handle the inevitable "Red Days" and how to maintain your Fortress for the long haul.
