Limit Order vs Market Order for Options - How to Get a Good Fill
Reviewed by Leon Moyer - Published October 9, 2026 - Last reviewed October 9, 2026
In this lesson
Compare market and limit orders for options, calculate what the bid-ask spread costs, and work a limit order toward a fill.
A market order fills promptly at the best available price, generally near the ask when buying or the bid when selling, but the price you get is not guaranteed. A limit order sets the worst price you will accept but may not fill. Because option quotes can be wide and move quickly, a limit order is usually the safer default.
Choosing between them is really a choice about the bid-ask spread, so that is where to start.
What is the bid-ask spread on an option?
Every option quote has two prices:
- The bid is the highest price someone is offering to pay. It is roughly what you can sell for right now.
- The ask (or offer) is the lowest price someone is willing to sell at. It is roughly what you can buy for right now.
The spread is the ask minus the bid, and the mid price is the bid plus the ask, divided by two. A quote of $1.90 bid and $2.10 ask has a $0.20 spread and a $2.00 mid.
Options spreads are often wider than those on the underlying stock; the Bid, Ask and the Spread lesson covers reading a quote in depth. One stock can have hundreds of option contracts across its strikes and expirations, and the trading in any single one is thinner. Exchanges set maximum quote widths under normal conditions and require their members to honor displayed quotes for a minimum size, as the Options Industry Council explains, but a spread that is small in dollars can still be large compared with the option's price.
What crossing the spread costs, per contract
Round trip at market, price unchanged
Market order vs limit order: which should you use for options?
The SEC's investor site defines both order types for any security, and the same definitions apply to options orders:
A market buy order generally fills at or near the ask, and a market sell at or near the bid. The price you last saw is not necessarily the price you get, and if your order is larger than the quantity shown at the best price, the rest can fill at the next price, and the next.
Worked example
Buying one XYZ 50 call two ways
Standard 100-share XYZ 50 calls are quoted $1.90 bid, $2.10 ask, so the spread is $0.20 and the mid is $2.00. Assume unchanged quotes and the hypothetical fills below; all results exclude fees.
- Market order: you fill at the ask, $2.10, and pay $210. Your break-even at expiration is $50 + $2.10 = $52.10.
- Limit order at the mid: you place a buy limit at $2.00. Nothing happens for a minute, so you raise it to $2.05, and a seller fills you. You pay $205, and your break-even is $52.05.
- The cost of crossing the spread: if you bought at the $2.10 ask and immediately sold at the $1.90 bid, you would lose $20 with no change in price at all. That is 10% of the $200 mid-price value, gone to the spread.
- A wide quote: a thinly traded option quoted $1.60 bid, $2.40 ask has the same $2.00 mid, but crossing it costs $80, or 40% of the mid-price value.
Illustrative and hypothetical. The ticker and prices are invented for teaching, and the figures exclude commissions, fees, margin interest and taxes, which reduce real results. Past or hypothetical outcomes do not indicate future results.
A limit order at the mid price will not always fill, and the limit price is a decision, not a formality. Saving $5 on a trade you meant to take is good; missing a trade over $5 you were willing to pay is not. The point of a limit order is to decide that price yourself rather than let the market decide it for you.
How do you work a limit order to get filled?
"Working" an order means adjusting it in small steps instead of accepting the first price on the screen:
- Consider a limit near the mid price. It is a starting reference, not a promise of a fill or fair value; use a permitted price increment.
- Watch the live quote. Reassess if prices move while you wait.
- Move toward the other side in small steps, a penny, a nickel or a dime at a time. The minimum price increment depends on the option's class and price: $0.01 below $3.00 and $0.05 at $3.00 or more for classes in the Penny Interval Program, $0.05 below $3.00 and $0.10 at $3.00 or more for the rest.
- Stop at your price. Decide beforehand the most you will pay (or the least you will accept) and cancel if the market will not meet it.
Working a limit order toward a fill
The quote
Bid $1.90, ask $2.10, mid $2.00
Limit $2.00
Watch the live quote
Limit $2.05
Still $0.05 below the ask
Filled at $2.05
Pay $205, not $210
Work closing orders the same way. The spread costs you on the way out as well as on the way in, which is why a round trip at market pays the full spread.
What is slippage in options trading?
Slippage is the difference between the price you expected and the price you got. In options it comes mostly from the spread, from orders larger than the displayed size, and from fast markets. The Options Industry Council advises extreme caution with market orders near the open or close, and care in volatile conditions, when prices can change quickly.
Stop orders deserve the same care. A stop becomes a market order once triggered, so a sell stop can fill below its stop price. Stop-limit orders instead become limit orders and may never fill. Broker support and trigger rules differ: the Options Industry Council notes that the option's price or the stock's price can serve as the trigger, so check what your broker uses.
When is a market order reasonable for options?
When the option trades actively, its spread is tight, your order is small, and prompt execution matters more than price control. A marketable limit at the bid (to sell) or ask (to buy) can also fill promptly while bounding the price, but a moving quote, lack of size or trading halt can prevent execution. Confirm that an exit actually filled.
Check your understanding
An option is quoted $3.40 bid, $3.60 ask. What are the spread and the mid price?
Show answer
The spread is $0.20 ($3.60 - $3.40) and the mid price is $3.50 (($3.40 + $3.60) / 2).
You buy one standard contract at that $3.60 ask and immediately sell at the unchanged $3.40 bid. Before fees, what does the round trip cost?
Show answer
$20. You buy at the $3.60 ask and sell at the $3.40 bid, losing the $0.20 spread on 100 shares.
What does a limit order guarantee, and what does it not?
Show answer
It guarantees you will not pay more than your limit (when buying) or receive less (when selling). It does not guarantee that the order fills.
Key takeaways
- A market order prioritizes execution without price protection; a limit order bounds the price if filled.
- Buying at the ask and selling at an unchanged bid costs the spread times 100 per standard contract before fees.
- Limit orders are the safer default for options; start near the mid and move in small steps.
- Slippage grows with wide spreads, large orders and fast markets, and stop orders become market orders when triggered.
Common questions
Should I use a limit or market order for options?
A limit order is usually the safer default. Option spreads are often wide and quotes change quickly, so a market order can fill well away from the price you saw. A limit order sets the worst price you accept, at the cost of possibly not filling.
How much does the bid-ask spread cost on a round trip?
About the full width of the spread if you buy at the ask and later sell at the bid. Buying at a $2.10 ask and selling at an unchanged $1.90 bid loses $20 on a standard 100-share contract before fees, even though the option's price never moved.
Why is my options limit order not filling?
A limit order may remain open because no one accepts your price or available size, or because the quote moved. Check the live bid and ask, displayed size and order status before changing or canceling your limit. Moving toward the other side may help, but a fill is never assured.
Why did my market order for an option fill so far from the quote?
A market order takes the best price available when it reaches the market. If the quote moved, the spread was wide, or your order was larger than the size shown at the best price, part or all of it can fill at worse prices. A limit order caps the price you pay or accept.