Joint investing accounts in Australia: How they work
Annabelle Dickson
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When trading on the ASX, one of the first decisions you’ll make is whether to place a market order or a limit order. The difference is straightforward:
- A market order prioritises speed and focuses on an investor agreeing to bid on whichever price the market is willing to pay.
- A limit order prioritises price control, meaning an investor determines the price they are willing to bid.
On the ASX, most “market orders” are implemented as market-to-limit orders. That means your trade first fills at the best available price and, if it doesn’t fill completely, the remainder becomes a limit order at that price.
Knowing how this works – and how the ASX trading phases affect execution – can help you avoid any unexpected outcomes.
Quick definitions
Market order: A market order is an instruction by an investor to a broker to buy or sell a financial asset at the best available price in the moment. For most investors, a market order is the standard choice for buying and selling, especially if the asset is a widely held one such as a large-cap stock or an ETF.
Limit order: A limit order is an instruction to buy or sell only at a price specified by the investor. These might be preferable if buying or selling a thinly traded or highly volatile asset.
Market order vs Limit order on ASX
| Feature | Market order on ASX (market-to-limit) | Limit order |
|---|---|---|
| Primary goal | Fast execution | Price control |
| Price certainty | Lower. You accept the best available price in the book | Higher. Executes only at your price or better |
| Fill certainty | Higher for liquid names, not guaranteed for full size | Not guaranteed. May partially fill or remain unfilled |
| Slippage risk | Higher, especially with wide spreads or thin depth | Lower. You cap your price risk |
| Auctions | Will queue and match at the auction price if marketable | Queues and matches if your limit is at or better than the auction price |
| Post Close | Any new orders must be at the CSPA price or are rejected | Same rule applies during Post Close |
| Typical implementation | Market-to-limit. Any remainder rests as a limit at the last fill price | Native limit instruction |
| Shines when | The security is highly liquid and you value immediacy | Liquidity is thinner, spreads are wider, or size is larger |
Sources: ASX trading phases and order mechanics; ASX education on market-to-limit.
Key concepts that affect both order types
Two factors shape how both market and limit orders behave on the ASX.
The first is the bid-ask spread: the gap between what buyers are willing to pay and what sellers are asking. In highly liquid securities like large-cap shares or broad-market ETFs, spreads are usually only a cent wide, so the difference between a market and limit order may not matter much.
But in small caps or thinly traded ETFs, spreads can be much wider. For market orders, that increases the chance of slippage. For limit orders, a wide spread may reduce the odds of your trade being matched.
The second is price/time priority. In the ASX’s continuous trading session, orders are matched first by price, then by the time they were placed. That means if you place a buy order at $10.00, you’ll only be filled once all earlier $10.00 buy orders have been satisfied.
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How ASX trading phases change your execution
The ASX isn’t a single continuous market. It has trading phases that affect how orders are handled:
- Pre‑open (07:00 to 09:59): Orders are queued. No continuous matching occurs. Your orders influence the indicative opening price.
- Normal Trading (approx. 09:59:45 to 16:00): Continuous matching in price/time priority. Most investors’ orders will be filled in this window.
- Pre‑CSPA (16:00 to 16:10): Continuous matching stops. Orders can be placed, changed or cancelled ahead of the close.
- Post Close (16:11 to 16:21:30): New orders and amendments must be at the official closing price. Orders not adhering to the CSPA (Closing Single Price Action) price are rejected.
When to consider a market order
A market order may suit you when execution speed matters more than the exact price.
Use cases:
- Highly liquid, tight‑spread securities during Normal Trading
- Smaller parcel sizes where potential slippage is minor in dollar terms
- Situations where you need certainty of getting set quickly, accepting some price variability
When to consider a limit order
A limit order is best when you want control over price and are comfortable with the risk of not filling immediately.
Use cases
- Less liquid small caps and thinly traded ETFs where spreads are wider and depth is shallow
- Periods around price‑sensitive news or during the open and close, when prices can gap
- Larger parcels where a few cents of slippage is meaningful
Common pitfalls and how to avoid them
Even experienced investors can run into trouble if they overlook how order types behave. Three common mistakes stand out:
- Trading into wide spreads: This magnifies slippage on market orders and lowers the chance your tight limit executes. To avoid this, check the spread first.
- Placing market orders during auctions without checking the indicative price: Your fill will occur at the auction price, which can be far from the last trade in volatile names.
- Forgetting Post Close rules: After the close, new orders must be made at the CSPA price in order to be accepted.
Choose the tool that fits the job
Both market and limit orders have their place.
If you value speed on liquid names during Normal Trading, a market order can be appropriate. If you value price control, especially in thin or volatile markets, a limit order is often the smarter tool.
Your decision should reflect liquidity, the current spread and the ASX market phase at the time you trade. For an objective education on key trading terms like bid‑ask spread, see ASIC Moneysmart.
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