Is it okay to buy at market price the morning after a stock price drop? | The pitfalls of 'limit orders' and 'market opening' that beginners should know
🍀 AI Stock Notes | Evening Edition, Saturday, November 7, 2026
“The stock price dropped, so maybe I should buy some on Monday?”
When you are investing in stocks, such situations arise.
However, I have one question for you here.
If you place a market order on Monday morning to buy a stock that closed at 1,000 yen on Friday, will you be able to buy it at 1,000 yen?
The answer is “not necessarily.”
In reality, it is possible to end up buying at a price higher than the previous day’s closing price, such as 1,050 yen or 1,080 yen.
Why does this happen?
In today’s AI Stock Notes, I will explain the mechanics of orders you should know before trading at the start of the week, using concrete examples.
※Since the Tokyo Stock Exchange cash equity market is closed on Saturday, November 7, today’s post is a weekend learning article rather than a market closing analysis.
■ ① What is the difference between market orders and limit orders?
The basic order methods when buying stocks are “market orders” and “limit orders.”
Market Order
This is an order that prioritizes the execution of the trade without specifying a price.
For example,
“I want to buy 100 shares of Company A. I am not specifying a price.”
This is such an order.
Market orders are prioritized over limit orders, but they do not guarantee that you will be able to buy at your desired price.
Also, there are cases where the order may not be executed due to a lack of counterparty orders.
Limit Order
This is an order where you specify the price conditions for the trade yourself.
For example,
“I want to buy 100 shares of Company A if the price is 1,020 yen or less”
is an order like this.
In this case, you will never buy at a price higher than 1,020 yen.
However, if a trade that meets your conditions does not occur, you may not be able to buy the stock.
This is an important difference.
Market orders prioritize the execution of the trade. Limit orders prioritize price conditions.
Neither is necessarily superior; you need to use them differently depending on your objective.
■ ② A stock that was 1,000 yen on Friday becomes 1,080 yen on Monday?
Let’s think about this using a fictional Company A.
The closing price on Friday was 1,000 yen.
After the weekend, we reach Monday morning.
Assume that corporate news came out over the weekend, and more people want to buy Company A stock.
As a result, the opening price on Monday became 1,080 yen.
At this time, the results may vary depending on the order method.
※This is a fictional example. It assumes there is sufficient trading volume and the opening price is established through normal order matching.
What you can understand from this table is that just because you set a limit order of 1,100 yen, it does not mean you will definitely buy at 1,100 yen.
It is possible that the trade will be executed at 1,080 yen.
On the other hand, with a limit order of 1,020 yen, you cannot purchase at the opening price of 1,080 yen.
After that, even if the stock price falls to 1,020 yen or less, there are cases where the trade may not be executed depending on the status of sell orders and the priority of orders.
While a limit order allows you to set a maximum purchase price, it is not an order that guarantees the purchase itself.
■ ③ What exactly is an ‘opening price’?
In the Japanese stock market, trading for the morning session usually begins at 9:00 AM.
The price at which the first trade of the day is executed is called the ‘opening price’.
And the act of the first trade being executed is called the ‘opening’.
The Tokyo Stock Exchange uses a mechanism called the ‘Itayose method’ to determine the opening price.
This is a method where sell and buy orders gathered before the start of trading are matched, and the price is determined according to specific rules.
In other words, even if the previous day’s closing price was 1,000 yen, it does not necessarily mean that trading will start at 1,000 yen on the next business day.
If there are many people who want to buy, it may start at a higher price, and if there are many people who want to sell, it may start at a lower price.
Also, if there is a large imbalance in orders, an opening price may not be set immediately even at 9:00 AM.
Yesterday’s closing price and the price you can actually buy at today are different things.
This is a point that I definitely want beginners to remember.
■ ④ If you buy 100 shares, how much will the amount change?
Let’s consider the case of buying 100 shares of Company A mentioned earlier.
※ This is a hypothetical calculation example excluding commissions.
If you buy a stock at 1,080 yen that you intended to buy at 1,000 yen, the purchase cost increases by 8,000 yen.
Moreover, if the stock price drops to 950 yen after buying at 1,080 yen, you will have an unrealized loss of 13,000 yen for 100 shares.
On the other hand, if you had bought it at 1,000 yen, the unrealized loss would be 5,000 yen.
Even for the same stock, investment results change depending on the purchase price.
However, buying at a low price does not guarantee a profit.
This is because the stock price may fall further afterward due to factors such as deteriorating corporate performance.
The important thing is not just buying cheaply, but trading at a price and quantity you are comfortable with.
■ ⑤ Can you avoid losses with a limit order?
There is one thing here that is easy to misunderstand.
“If I use a limit order, can’t I prevent losses?”
Some people might think that.
However, a limit order is not a mechanism to prevent losses.
For example, even if you are able to purchase a stock with a limit order of 1,000 yen, if the stock price subsequently drops to 900 yen, you will incur a 10% unrealized loss.
What you can manage with a limit order is the price condition at the time of the order.
You cannot manage the stock price after the purchase.
Also, even if you use a stop-loss order to limit losses, if the price changes suddenly, you may not be able to sell at the specified price.
Understanding order methods and managing investment risks are separate issues.
That is why it is important to think not only about operating the order screen, but also about the reasons for purchasing and fund management.
■ ⑥ 5 things to check on Monday morning
If you are thinking of buying stocks at the start of the week, please check the following 5 items before placing an order.
□ 1. Did you check the closing price of the previous business day?
Check at what price the stock finished trading most recently.
□ 2. Has any new news come out over the weekend?
Investor perspectives may change due to financial results, earnings revisions, corporate IR, etc.
□ 3. Do you understand the order methods?
Understand that with a market order, there is a possibility of execution at an unexpected price, and with a limit order, there is a possibility that it will not be executed.
□ 4. Have you calculated the purchase cost?
Confirm the funds required for the purchase based on the order price and quantity.
□ 5. Have you decided how to respond if your prediction is wrong?
Think in advance about what you will check and how you will make decisions if the stock price falls after you purchase it.
Just checking these things will help reduce the risk of placing orders in a panic.
■ ⑦ What should we look at next week on Monday, November 9?
The next regular trading day for the Tokyo Stock Market is Monday, November 9.
What we want to pay attention to at the start of the week is not just whether the Nikkei Stock Average goes up or down.
For example, for a stock you are interested in, let’s compare:
・The closing price on Friday, November 6 ・The opening price on Monday, November 9 ・The price movement after the market opens
Let’s compare these.
By observing the difference between the closing price of the previous business day and the opening price, you can realize that the price you knew the night before is different from the price at which trading actually began.
However, you cannot determine what caused that difference without checking news, order status, and so on.
In the next morning edition, I would like to organize the information to watch for in the market at the start of the week, and in the evening edition, I would like to check it against the actual results.
🍀 Today’s Summary
What is important in stock investment is not just “finding good stocks.”
At what price, using what kind of order method, and in what quantity will you purchase?
These are also important parts of investment judgment.
There are three points to remember this time.
1. Since market orders do not specify a price, there is a possibility that the trade will be executed at an unexpected price.
2. While limit orders allow you to specify price conditions, there is no guarantee that the trade will be executed.
3. There is no guarantee that the previous day’s closing price and the next business day’s opening price will be the same.
For those who have just started stock investing, it is also recommended to practice with hypothetical prices and quantities before placing actual orders.
Let’s take our time and understand the mechanisms one by one.
🍀 A message from AI Stock Notes
“Stock market news is difficult, but I want to learn about Japanese stocks little by little.”
For those people, AI Stock Notes delivers learning articles twice a week, in the morning and evening editions.
If you found this article helpful, I would be happy if you could support us with a “Like”.
Also, if you would like to continue learning about Japanese stocks with us, please follow us and read the next article.
When you buy stocks, which do you use more often, “market” or “limit” orders?
Please let me know in the comments if you’d like. 🍀
References and Sources
Japan Exchange Group (JPX), “Methods of Trade Execution”,
https://www.jpx.co.jp/equities/trading/domestic/04.html
TSE Money-bu!, “Trading Rules (Advanced)” (Updated November 28, 2024),
https://money-bu-jpx.com/basic/stock/equities/rule-02/
Japan Exchange Group (JPX), “Frequently Asked Questions | Trading Hours and Holidays”,
https://www.jpx.co.jp/faq/others_general.html
Source verification date: November 8, 2026.
All price and profit/loss calculation examples are hypothetical. They are not actual market results.
*This article is intended for learning about stock investment and does not guarantee the trading or profit of any specific stock.
#JapaneseStocks #StockInvestmentBeginner #MarketOrder #LimitOrder #StockInvestment #AIStockNotes