How to use limit order as a market order?

To understand this let’s understand first what is Limit order.

A limit order is an order to buy or sell a security at a specific price or better. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher.

So Here the question is how a limit order can be used as a market order.

For a buy trade

Whenever we place a limit buy order we generally place the same at a price equal to or less than the current offer price. In such cases till a seller places an order at the price set by us the same will be pending. Here in case we actually want to buy immediately our required quantity what we can do is instead of placing a market order we can put the limit order price at a higher price than the current offer price. In case of a market order the risk due to illiquid stocks can be very high in terms of the impact cost and the difference of buy & sell being high. So by placing an Limit order at a higher price than the current price will restrict the limit to which the trade can get executed and in a sense will act like a market order but with a price limit.

For a Sell trade

Similarly in case of sell trade we place a limit order lower than the current price will act as an market order but with the restriction on the limit to which it can go down to sell.

Alternatively at Tradejini we also provide an feature called as Market protection for all market orders. This is a user defined field which is available in the settings menu and it acts as a restriction upto which an Market order either up or down i.e., buy or sell can get executed limiting the risk to the trader in case of illiquid stocks and where the market depth is very limited. It also acts as an additional safety during market volatality or where huge market orders can cause losses to traders while placing market price orders.