Excerpt from CNN Money (http://money.cnn.com)
When trying to place a buy or sell order, you'll be faced with all sorts of questions: Market or limit order? "Day only" or "Good 'till cancelled." Here's the vocabulary you need to know to place a trade.
If you place a market order with your broker, then you are saying that you're willing to buy at whatever happens to be the prevailing price for the stock.
If you have a specific price in mind, you can set a limit order specifying the price you're willing to pay. If the stock dips down to that level, your order will be automatically filled.
Limit orders can be left open for a single day (a day order) or indefinitely (good until canceled).
After you've bought a stock, you can instruct your broker to sell it if the price drops to a level you specify (a stop loss order). That's a kind of insurance; it means that no matter what happens to a stock's price you'll never lose more than a specified amount.