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Market Order

A market order is an order to buy or sell a security at the best available price in the market. It guarantees immediate execution but does not guarantee the price at which the order will be filled, especially in fast-moving markets. Market orders are typically used when the priority is to execute the trade quickly rather than at a specific price, making them ideal for highly liquid securities.

Example

A trader places a market order to buy 100 shares of a stock, and the order is filled at the best available price, ensuring immediate execution.

Key points

• An order to buy or sell a security at the best available market price.

• Guarantees immediate execution but not the price at which the order is filled.

• Commonly used for highly liquid securities where speed is more important than price.

Quick Answers to Curious Questions

A market order is an order to buy or sell a security at the best available price, ensuring immediate execution.

Traders use market orders when speed is more important than price, especially in highly liquid markets.

The downside is that the final execution price may differ from the expected price, especially in fast-moving or volatile markets.

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