Market order
An instruction to buy or sell immediately at whatever prices the order book currently offers, working through successive price levels until the full size is filled.
Example
A 1,000-share market order against a book of 250 at 47.95, 400 at 48.02 and 350 at 48.10 pays an average of 48.0305.
Important
It guarantees execution, never price. In anything other than a deeply liquid security, the difference between the quote and the fill is a cost you pay without ever seeing it itemised.
Related terms
- Limit order — An instruction to buy or sell only at a stated price or better. It joins the order book and waits, and may never execute.
- Order book — The live, price-ranked list of all resting buy and sell orders for a security, showing how many shares are available at each level on each side.
- Bid-ask spread — The gap between the highest price a buyer will pay and the lowest a seller will accept. A cost paid on every round trip.
- Liquidity — How quickly and cheaply an asset can be converted to cash without moving its own price.
Lessons that explain it
All 578 terms in the Investing glossary