Glossary
What is Market Order? Meaning, Example & Why It Matters
An order to buy or sell immediately at the best price currently available in the market.
A market order tells your broker to execute your trade right away at whatever the best available price is. You do not specify a price; you prioritise speed and certainty of execution over price. In liquid stocks during normal market hours, market orders usually fill almost instantly at a price close to the last traded price.
Why Market Order matters to you
The risk is that you do not control the price. In fast-moving or illiquid markets, the best available price can be quite different from the price you saw on screen, especially for large orders that eat through several levels of the order book. This difference is called slippage and is a hidden cost of trading.
Exchanges and brokers have introduced safeguards, such as converting market orders to limit orders with a protection range, to reduce extreme fills. Some brokers block market orders in certain illiquid contracts. These protections help but do not remove the risk entirely.
Practical tip: use market orders mainly in highly liquid instruments and modest sizes. For illiquid stocks, options with wide spreads, or volatile moments like market open, consider a limit order instead so you know the worst price you will accept.
Example: Illustrative only: if a stock shows ₹100.00 last traded but the best sell offers are ₹100.20 for a small quantity and ₹100.50 for more, a large market buy may fill at an average above ₹100.20.
See it in rupees: every charge and tax on a real trade, at every broker. Open the brokerage calculator
Related terms
- GlossaryLimit Order
An order to buy or sell only at a specified price or better, giving you control over the execution price.
- GlossarySlippage
The difference between the price you expected for a trade and the price at which it actually executed.
- GlossaryStop-Loss Order
An order that triggers a buy or sell once the price reaches a set level, used to limit losses on a position.
- GlossaryOrder Execution Latency
The time delay between placing an order and it being received, executed and confirmed by the exchange.
Frequently asked questions
Will a market order always execute?
It usually executes if there are buyers or sellers available, but in illiquid stocks or at circuit limits, it may not fill or may fill only partly.
Is a market order more expensive?
Brokerage is usually the same, but you may pay a worse price due to slippage, which is a hidden cost.
Can I place market orders before the market opens?
Some brokers allow orders in pre-open sessions or as after-market orders, which are sent when the market opens. Rules vary by broker.