Market Orders

Market orders are instructions to buy or sell securities immediately at the best available current price. They prioritize speed of execution over price. Key Characteristics: • Executed immediately at current market price • Guaranteed execution (if market is open) • Price not guaranteed - may vary from last traded price • Best for liquid stocks with tight bid-ask spreads When to Use Market Orders: • When you need immediate execution • For highly liquid stocks (large-cap) • When price movement is more important than exact price • During normal market hours with good liquidity Advantages: • Immediate execution • Simple to place • No risk of missing the trade • Good for urgent transactions Disadvantages: • Price uncertainty • May get poor prices in volatile markets • Slippage risk in illiquid stocks • No control over execution price Market Order Process: 1. You place a market order to buy/sell 2. Order goes to exchange immediately 3. Matches with best available counter order 4. Execution happens at prevailing market price 5. Confirmation sent back to you Price Impact Factors: • Stock liquidity and trading volume • Market volatility at time of order • Order size relative to available quantity • Time of day (opening/closing more volatile) Best Practices: • Use only during market hours • Avoid for illiquid or penny stocks • Check current bid-ask spread before placing • Consider order size impact on price