Market-On-Close Order - MOC

What is a 'Market-On-Close Order - MOC'

A market-on-close order (MOC) is a non-limit market order that is executed as close to the end of the market day as possible. All MOC orders must be submitted by 3:45 p.m. ET on the NYSE and by 3:50 p.m. ET on the Nasdaq, as both of them close at 4 p.m. and neither exchange allows for the modification or cancellation of MOC orders after those times.

BREAKING DOWN 'Market-On-Close Order - MOC'

Market on close (MOC) means that the investor wants to buy or sell a given financial instrument at the last price that is dealt in the market at the end of the trading day. MOC orders do not specify a target price; some analysts believe that this makes it too easy to take advantage of investors by giving a poor execution.

Types of Orders

Also known as a take-profit order, a limit order stipulates the target level at which a purchase or sale will be executed. The level at which a limit order is placed is always better than the market price at the time the order is initiated. The target price could be designed to take profit on an existing position, limit a loss or enter a new position. A stop-loss order is essentially a worst-case scenario and again can take profit, limit a loss or enter a position. "At best" is a market order to buy or sell at the best price available in the market for the desired volume at the time that the order is placed.

"One cancels the other" or "order cancels order" (OCO) is a combination of a limit order and a stop-loss order. When either target level is hit and the trade is executed, the other side of the order is automatically cancelled.

"Good till cancelled" (GTC) is an order that will remain in effect until the transaction is executed or cancelled; there is no limit as to how long such an order can remain in place. GTC orders are usually placed to take profit on an existing position.

MOC Execution

An MOC order is a market order that will be executed at or just after the close. It is sometimes used as a limit order qualifier, which means that if a limit order isn't executed during the trading day, that order will be automatically cancelled and replaced with an MOC order. This ensures that the desired transaction is executed, but it leaves the investor exposed to end of day price moves.

This type of order offer protection to investors by ensuring the purchase or sale of a stock that might move drastically overnight as the result of a scheduled after-hours earnings announcement or an anticipated news story. They also are useful to investors who may not be available to execute an essential transaction at the end of the day. The risk of using an MOC order, however, is that a cluster of orders in thin end-of-day trading can lead to a poor execution.