A buy order flips the usual market flow. Instead of picking a listing and paying the seller's price, you name your own price and wait. When a seller lists at or below that price, or chooses to sell straight into your order, the deal completes on its own. The Steam Community Market and most third-party marketplaces support buy orders, though the details differ.
How do buy orders work on the Steam Market?
On the Steam Community Market you place a buy order for an item name, a quantity and a maximum price. The Community Market FAQ explains that the order price is the most you will pay, so if a cheaper listing appears you only pay that lower price. You can have open orders worth up to ten times your wallet balance, and an order is cancelled if your wallet cannot cover it. When a new listing matches several buy orders, Steam fills the oldest order first, a rule it changed in 2017 to be fair to every currency. Steam buy orders match on the item name and wear, not on float, pattern or stickers, so you cannot use them to hunt a specific float.
The list of open buy orders is public. That makes buy orders the best gauge of what buyers actually pay right now. The top buy order is the bid, the lowest listing is the ask, and the gap is the spread.
Why do traders use buy orders?
Patience gets a better price. A seller who needs money fast will sell into the top buy order rather than wait for a listing to fill, so a buy order set a little below the lowest listing often fills within hours or days. Traders also use buy orders to build stock in bulk, for example collecting ten cheap skins of one collection for a trade-up contract without checking the market every hour.
The risk is that the market moves. If prices drop, your order fills at the old, higher price. If prices rise, your order never fills. Cancel orders you no longer want from the Market front page, and remember that Steam can cancel an order itself if your wallet balance drops or something about the item changes.