Illiquid stocks trade with low volumes and wider bid–ask spreads, which can cause large price jumps on execution. To avoid poor fills, use limit orders so you control the price instead of accepting whatever is available.
Explanation
- Why market orders are risky: With few buyers or sellers, a market order can sweep multiple price levels and fill far from the last traded price, causing slippage, freak trades, and sudden execution jumps.
- Why limit orders help: You specify the maximum buy price or minimum sell price. The order executes only if the market trades at your limit or better.
How to place a limit order on FYERS?
- Select Limit as the order type.
- For a buy, start near the current best offer; for a sell, start near the best bid.
- Enter a realistic quantity aligned with recent traded volumes.
- Place the order and monitor the depth. If it does not fill, modify the limit in small steps.
- If conditions deteriorate, cancel and reassess before retrying.
Always prefer limit orders in illiquid stocks and review spread, depth, and recent volume before sending your order.
What if...
| Scenario | Explanation |
|---|
| I place a market order in an illiquid stock | It may execute at an extreme price due to thin opposing bids or offers. |
| My limit order does not execute | The market has not reached your limit. You can modify the price or cancel the order. |
| I want to reduce slippage | Use limit orders and size conservatively relative to recent traded volume. |
Last updated: 07 Nov 2025