1. Introduction To Order Types: Introduction
  2. Introduction To Order Types: Long And Short Trades
  3. Introduction To Order Types: Market Orders
  4. Introduction To Order Types: Limit Orders
  5. Introduction To Order Types: Stop Orders
  6. Introduction To Order Types: Conditional Orders
  7. Introduction To Order Types: Duration

Note: Use a market order to guarantee a fill. A market order is the fastest and most reliable way to get in out of a trade. A market order is appropriate if getting filled is more important than getting a certain price.

A market order is the most basic type of trade order. It instructs the broker to buy (or sell) at the best price that is currently available. Order entry interfaces usually have "buy" and "sell" buttons to make these orders quick and easy, as shown in Figure 1. Typically, this type of order will be executed immediately. The primary advantage to using a market order is that the trader is guaranteed to get the trade filled. If a trader absolutely needs to get in or out of a trade, a market order is the most reliable order type. The downside, however, is that market orders do not guarantee price, and they do not allow any precision in order entry and can lead to costly slippage. Using market orders only in markets with good liquidity can help limit losses from slippage.


Figure 1 - A market order is the most basic type of trade order. Order entry interfaces usually have "buy" and "sell" buttons to make these orders quick and easy. Image created with TradeStation.

Ideally, a market order to buy is filled at the ask price, and a market order to sell is filled at the bid price. It is essential to remember, however, that the last-traded price is not automatically the price at which a market order will be executed. This is especially true in fast-moving or thinly traded markets.

For example, a trader may place a market order to go long 1000 shares of ABC stock when the best offer price is currently $20.00 per share. If other orders in the queue are executed before this trader's order, the market order may fill at a higher price. It is possible, also, that parts of the order will execute at different prices. In this example, half of the order might execute at the best offer price and the other could fill at a higher price. A market order does not guarantee price - it only guarantees a fill.

Introduction To Order Types: Limit Orders

Related Articles
  1. Trading

    How To Start Trading: Order Types

    The types of orders you use can have a large effect on your trading performance, so understanding the different order types is important to your success.
  2. Trading

    Intermediate Guide To MetaTrader 4 - Order Types

    Traders have the option of placing different order types using the MT4 platform. Market OrderA market order is the most basic type of trade order and is used to buy or sell a security at the ...
  3. Trading

    The Basics Of Trading A Stock

    Taking control of your portfolio means knowing what orders to use when buying or selling stocks.
  4. Markets

    Explaining Market Orders

    A market order is the most common order used to purchase a financial security.
  5. Markets

    Understanding Order Execution

    Find out the various ways in which a broker can fill an order, which can affect costs.
  6. Investing

    NYIF Instructor Series: "Fill or Kill" Order

    In this short instructional video Anton Theunissen explains what the "fill or kill" order is.
  7. Trading

    Making The Trade: Understand Order Types

    Buying and selling stock can be a lot like buying or selling a car. Traders should use and understand tools such as market orders, limit orders, day orders, and good-'til-canceled orders to ensure ...
  8. Managing Wealth

    Narrow Your Range With Stop-Limit Orders

    With stop-limit orders, buyers protect themselves from prices too high for their tastes.
  9. Personal Finance

    When Using a Money Order Makes Sense

    Money orders are usually the least expensive way to send "cleared" funds to pay a bill (or traffic ticket). Here's how they work and what to watch out for.
  10. Trading

    Beginner's Guide To ScottradeELITE Online Trading - Trading

    Traders and investors can use the ScottradeELITE platform to place orders for stocks, ETFs and options. Placing a Stock or ETF OrderThe ScottradeELITE Order Entry window is where orders to ...
Trading Center