Limit Orders vs Stop Orders
A limited order is visible to the market and tells your broker to fill out your buy or sell order at a specific or better price.
A stop order is not visible by the market and will issue a limited order once a stop price has been reached.
A stop order avoids the risk of non-filing or partial filling, but as this is a market order, it is possible that your order is executed at a price well below what you expected.
A limit order is simply an order to buy or sell a stock at a specific price. For instance, if you want to buy stocks with a value of $100 at $100 or less, you can set a limit order that will not be executed unless the price you specified is available. However, you can not set a limit order to buy a stock above the market price, because a better price is already available.
You can put a cap on a limit order to sell a stock when a specific price is available. Suppose that you have shares worth $65 per share and want to sell them if the price is $70 per share. A limited order can be put at $70 and will only be filled at this price or better. You can not set a limit order to sell below the current market price because better prices are available.
A stop order exists in a few various forms, but they are all considered conditional on a price that was not yet available on the market at the time of the initial order. The moment the future price becomes available, a stop order will be activated, but contingent upon its type, the broker will execute them in disparate ways.
Many brokers are inserting the term "stop on quote" to their order types to clarify that the stop order will only be activated once a legal quoted price on the market has been reached. For example, if you set a stop order with a stop price of $100, it will only be triggered if a valid quote of $100 or more is reached.
A stop order is morphed into a traditional market order once your stop price is reached or surpassed. A stop order can also be construed as an entry order. If you want to open a position when the price of a stock is skyrocketing, you can set a stop-over order above the current market price, which becomes regular market order as soon as your stop price is reached.