Glossary · Orders & trading · Beginner-friendly
Market order
In plain English
A market order says “buy or sell right now at the best available price.” You get speed, but you don’t control the exact price.
Everyday analogy: Jumping in a taxi and saying “just go” - you’ll move immediately, fare unknown.
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Why it matters
Market orders buy speed. In liquid names that is often fine; in thin or gappy tapes it can be expensive.
A bit more detail (optional)
When it fits
Urgent exits in liquid names often use market orders. In thin names or around gaps, slippage can surprise you.
Risk
You control neither the exact fill price nor protection against a sudden air pocket in the book.
Simple examples
Gap open
You want yesterday’s close. Overnight news gaps the open higher. A market buy fills near the new open - not the old close.
Overnight gap
You place a market buy at the open after a takeover rumor. You get filled near the gap open - far from yesterday’s close.
Easy mistakes to avoid
- Defaulting to market orders in illiquid names
- Using market orders into binary events without accepting gap risk
- Confusing “fill now” with “fill at last night’s close”
Remember: Use market orders when urgency beats price precision - and the book is deep.