Market Order


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."


Loading the player...

BREAKING DOWN '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.

  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. Market If Touched - MIT

    A conditional order that becomes a market order when a security ...
  6. Market-On-Close Order - MOC

    A non-limit (market) order executed as close to the end of the ...
Related Articles
  1. Brokers

    Explaining Market Orders

    A market order is the most common order used to purchase a financial security.
  2. Investing Basics

    Understanding Order Execution

    Find out the various ways in which a broker can fill an order, which can affect costs.
  3. Forex Education

    How To Place Orders With A Forex Broker

    Learn how to set each type of stop and limit when trading currencies.
  4. Professionals

    How Brokers Can Avoid A Market-Maker's Tricks

    Ensure that you and your clients are getting the best deal by avoiding these three pitfalls.
  5. Active Trading Fundamentals

    The Basics Of Trading A Stock

    Taking control of your portfolio means knowing what orders to use when buying or selling stocks.
  6. Options & Futures

    Brokers and Online Trading

    How do you find the right broker for your investment needs? Start by reading our broker tutorial.
  7. Investing

    How to Win More by Losing Less in Today’s Markets

    The further you fall, the harder it is to climb back up. It’s a universal truth that is painfully apparent in the investing world.
  8. Fundamental Analysis

    Value Investing Strategies in a Volatile Market

    Volatile markets are a scary time for uneducated investors, but value investors use volatile periods as an opportunity to buy stocks at a discount.
  9. Mutual Funds & ETFs

    Using Short ETFs to Battle a Down Market

    Instead of selling your stocks to get gains, consider a short selling strategy, specifically one that uses short ETFs that help manage the risk.
  10. Mutual Funds & ETFs

    How to Lower Investment Account Fees in Retirement

    Retired investors need all the money they have, which is why they should keep an eye on investment fees, as high fees can lower returns.
  1. How do I set a strike price in foreign exchange trading?

    In trading with a foreign exchange, a trader can set a strike price for a currency pair by entering a limit order or a stop ... Read Full Answer >>
  2. Are stop orders only used for stocks?

    Stop orders can be used for a variety of securities and are not limited to stocks. They can be extended to other securities, ... Read Full Answer >>
  3. What is the difference between a stop and a market order?

    A stop order and a market order are different order types that dictate how to enter and execute trades. Traders and investors ... Read Full Answer >>
  4. What are the advantages of a limit order over a market order?

    The primary advantage of a limit order over a market order is that the limit order guarantees market entry at the trader's ... Read Full Answer >>
  5. Why do limit orders cost more than market orders?

    Two common ways to trade stock are market orders and limit orders. A market order is the simplest type of stock trade; it ... Read Full Answer >>
  6. What's the difference between a market order and a limit order?

    When an investor places an order to purchase or sell a stock, there are only two fundamental execution options: place the ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  2. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  3. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  4. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  5. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  6. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!