A market order says fill me now, at the price on offer.
A limit order says fill me at this price or better, or not at all.
Every quote has two sides. The bid is what buyers offer. The ask is what sellers accept. The gap between them is the spread.
A market buy pays the ask. A market sell takes the bid.
Each side costs about half the spread, against the midpoint. A round trip, a buy and a later sell, costs the whole spread.
The fair limit
The midpoint is halfway between the bid and the ask in your broker’s quote.
The fair limit is midpoint + X¢ to buy, midpoint − X¢ to sell.
X is half the fund’s typical spread in cents, rounded up, and never less than 1¢.
Each fund’s trading page prints its own X. If an order does not fill, move the limit 1¢ at a time.
Two real funds
BIL had a 30-day median spread of 0.01% to Oct 22, 2026. Its fair limit is midpoint + 1¢ to buy, midpoint − 1¢ to sell.
At the Oct 22, 2026 close of $91.60, that was $91.61 to buy and $91.59 to sell.
TINY had a 30-day median spread of 0.64%. Its fair limit is midpoint + 22¢ to buy, midpoint − 22¢ to sell.
On $10,000, that is about $0.50 a side in BIL and $1.00 for a round trip. In TINY it is $32 a side and $64 for a round trip.
When a market order costs little
In a fund that scores Liquid or better, in the middle of the day, the spread is often 1¢. A market order then costs about the same as a limit.
When a limit matters
A fund that scores Thin or Hard to trade.
A fund whose holdings trade in a market that is closed.
A new fund, or the first minutes after the open.
A sell-off, when spreads widen.
A stop order becomes a market order once it triggers. The stop orders guide explains why that matters.