Market Wizards by Jack Schwager

How do I place a market order?

A market order buys or sells a security immediately at the best available price. To place one: select the stock, choose "Buy" or "Sell," enter the quantity, select "Market" as the order type, and confirm. Market orders are the simplest type and execute almost instantly during market hours. The risk is you do not control the exact price, which matters most for thinly traded or volatile stocks.

What is the difference between market cap large-cap, mid-cap, and small-cap stocks?

Market capitalization (market cap) = share price × total shares outstanding. Large-cap stocks (market cap > $10 billion) like Apple or Microsoft are established, stable companies. Mid-cap ($2–$10 billion) offer growth potential with moderate risk. Small-cap (< $2 billion) offer higher growth potential but more volatility. Most diversified portfolios include a mix, often tilted toward large-cap for stability.

What is a limit order vs a market order — when should I use each?

Use a market order when you want immediate execution and the stock is highly liquid (like an S&P 500 ETF) — price precision matters less. Use a limit order when trading less liquid stocks, entering at a specific price point, or if a small price difference is meaningful. During volatile markets or for thinly traded securities, always use limit orders to avoid paying much more (or receiving much less) than expected.