What is a market order?

Summary

A market order seeks prompt execution at the best available prices in the market. It controls urgency rather than the final price, so the execution can differ from the last traded price or the quote seen a moment earlier.

Definition

A market order is an instruction to buy or sell promptly at the best available prices then available in the market, without setting a specific execution price. The article explains that market orders are marketable by design and normally reach towards the current ask for a buy or the current bid for a sell. This matters because the trader gives up price control in exchange for a higher likelihood of immediate execution. During normal conditions a market order may execute at or near the current quote, but in fast, wide or thin markets the final price can differ materially if quotes move or available size at the best level is limited.

Sources

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