Do you buy options using limit buy purchases or market price orders and why or why not?

Because the options markets are still not very liquid, limit orders work best (though you will miss some entries). In very liquid contracts, like in the Qs, which also have tight spreads with a lot of size on the bid/offer, market orders would work just fine. It is really a matter of liquidity. In thinly-trades issues, limit orders are a must, in very liquid contracts, market order work just fine, and ensure that you will not miss a trade.

I always use limit orders. Market makers will screw their own mother to make money and will happily screw you if given a chance, so you can really get burned on market orders.

Options for most underlyings have a low liquidity and the bid ask spreads that the marketmakers post are hence HUGE. If you place a limit order in between you get a fairer price.

Tip: place limit orders to buy two thirds between the bid and the ask. ie bid/ask of 1.00/1.30 you place the limit buy order at 1.20. If you are selling the option then place the sell order at 1.10. That way you get a good chance of getting filled at a price close to fair.

If it is an order you need to be sure is filled to protect your financial health, use a market order. Otherwise, use a limit order.

The first three answers correctly identified some good reasons that a limit order is preferable, but if you write naked options (including those in ratio spreads) you may find yourself in a situation where you need to buy some options quickly to control your risk. When you use a limit order there is a chance the order will not be filled, but if you use a market order you can be sure the order will fill.

The short answer is limit orders.

The long answer is that using options successfully (which may involve losing money on options -- therefore "successfully," not "profitably") first and foremost involves calculating and sticking to a strict cost model. In other words, doing the math should give you an estimate of options trading at a discount to historic volatility or , at least, not trading at a premium. Buying at a premium regularly will always lead to broken hearts and crushed dreams.