Order types
Market orders
3 min
A market order is the simplest instruction you can give: buy (or sell) right now, at the best price currently available.
How it behaves
When you send a market buy, it sweeps the lowest asks in the order book until your full quantity is filled. A market sell does the same against the highest bids. The defining trait is that it prioritizes speed and certainty of execution over price — it will fill, but you accept whatever price the book offers.
The trade-off: slippage
Because you take the prices in the book, the price you actually get can differ from the last quote you saw — this is called slippage. On a deep, liquid blue chip the difference is usually a cent or two. On a thin small cap, a market order can fill across several price levels and cost noticeably more than expected.
When to use it
- When you must get in or out immediately and the exact price is secondary.
- On highly liquid stocks where slippage is tiny.
- To exit a position quickly in fast-moving conditions.
When to avoid it
- On illiquid stocks with a wide spread, where you could overpay badly.
- During auctions or volatile opens, where prices are unsettled.
For a beginner, a market order is fine on a liquid blue chip, but for anything thinly traded, prefer the limit order in the next lesson.
This content is for educational and informational purposes only and is not investment, financial, tax or legal advice. Trading and investing carry risk, including the possible loss of capital. Any performance shown by third-party tools is hypothetical and not a promise of future results. Do your own research and consider professional advice before making any decision.