A market order is an instruction to buy or sell an asset immediately at the best available current price, prioritising speed over price control.
A market order tells your broker or exchange to execute a trade right away at the best price currently available in the market.
The main advantage is speed and certainty of execution. If you need to get in or out of a position immediately, a market order will fill almost instantly while the market is open and liquid.
The trade-off is price uncertainty. In fast-moving or thinly traded markets, the price you actually get can differ from the last quoted price, a phenomenon called slippage.
Market orders work best for liquid assets with tight spreads, where the difference between bid and ask is small. For less liquid assets or precise entries, a limit order gives you more control.
You place a market order to buy 1 unit when the quoted ask is $100. In a liquid market it fills near $100 instantly. But in a thin market, your order might sweep through several offers and fill at an average of $102, a $2 slippage cost from the speed of execution.
A market order executes immediately at the best available price, prioritising speed. A limit order only executes at your specified price or better, prioritising price control but with no guarantee it fills.
Slippage is the difference between the price you expected and the price you actually got. It happens when the market moves or there is not enough volume at the quoted price, and it tends to be larger in fast or illiquid markets.
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