Author: Livia Tay, MY
Last Updated: January 2, 2025
As part of a trading company’s customer service team, it's essential to understand Market Orders, a basic but vital trading tool. A Market Order is an instruction to buy or sell a security immediately at the best available price in the market, ensuring quick execution.
How Market Orders Work
- A Market Order is filled at the current best available price, either the lowest ask price (for buying) or the highest bid price (for selling).
- The order is executed instantly, with no price guarantee, which means the trader may experience slippage; where the price of execution differs from the price seen when placing the order.
Frequest Asked Question on Market Orders
Q1: Why did my market order execute at a different price?
A1: Slippage happens in volatile or low-liquidity markets, causing execution prices to vary.
Q2: Can I cancel a market order?
A2: Once placed, market orders cannot be canceled if execution is in progress.