Market Order

AAA

DEFINITION of 'Market Order'

An order that an investor makes through a broker or brokerage service to buy or sell an investment immediately at the best available current price. A market order is the default option and is likely to be executed because it does not contain restrictions on the buy/sell price or the timeframe in which the order can be executed.

A market order is also sometimes referred to as an "unrestricted order."

INVESTOPEDIA EXPLAINS 'Market Order'

A market order guarantees execution, and it often has low commissions due to the minimal work brokers need to do. Be wary of using market orders on stocks with a low average daily volume: in such market conditions the ask price can be a lot higher than the current market price (resulting in a large spread). In other words, you may end up paying a whole lot more than you originally anticipated! It is much safer to use a market order on high-volume stocks.

RELATED TERMS
  1. Limit Order

    An order placed with a brokerage to buy or sell a set number ...
  2. At Limit

    An order that sets a maximum limit on the buy price and/or a ...
  3. Opening Cross

    A method used by the Nasdaq to determine the opening price for ...
  4. At Best

    An order to fill a transaction at the most desirable price available, ...
  5. Split Block Pricing

    The act of dividing a large order of financial securities into ...
  6. Market-On-Close Order - MOC

    A non-limit (market) order executed as close to the end of the ...
Related Articles
  1. What's the difference between a market ...
    Active Trading Fundamentals

    What's the difference between a market ...

  2. Understanding Order Execution
    Investing Basics

    Understanding Order Execution

  3. How To Place Orders With A Forex Broker
    Forex Education

    How To Place Orders With A Forex Broker

  4. How Brokers Can Avoid A Market-Maker's ...
    Professionals

    How Brokers Can Avoid A Market-Maker's ...

comments powered by Disqus
Hot Definitions
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  2. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  3. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  4. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  5. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  6. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
Trading Center