Market Order
An order to buy or sell a security immediately at the best available current price.
Definition
A market order is an instruction to buy or sell a security immediately at the best available price. Market orders prioritize speed of execution over price — they are virtually guaranteed to be filled but the exact execution price is not guaranteed, especially in fast-moving or illiquid markets. The difference between the expected price and the actual execution price is called slippage. Market orders are best used for highly liquid securities with tight bid-ask spreads. For less liquid securities or during volatile periods, limit orders may be preferable to control the execution price. Most retail stock trades are executed as market orders.
Related Terms
Limit Order
An order to buy or sell a security at a specific price or better.
TradingSpread
The difference between the bid (buy) and ask (sell) price of a security.
MarketsLiquidity
The ease with which an asset can be converted to cash without significantly affecting its price.
TradingStop-Loss Order
An order to sell a security when it reaches a certain price to limit losses.