What Is A Market Order?
This is a series of explainers to educate and inform new investors. In association with Dun & Bradstreet India as knowledge partner.
What is Market Order: Definition, Meaning & Basics
A market order is an order in which an investor placing the order to buy or sell shares does not specify the price of the order. This means that the investor is ready to accept the best price offered by stock markets to buy or sell a stock. This order is different from a limit order, where an investor can specify the price at which he wants to buy or sell shares.
When a market order is placed, it automatically matches with the best available opposite order in the market. This means a buy order matches with the best sell order and a sell order matches with the best buy order.
The market order-type helps in immediate execution of a transaction at available market price. One market order may also match with multiple sell orders depending upon the quantity placed in a buy order and the available sell orders. In such a situation, a market order is executed on time priority basis.