Market OrderMKT
A market order buys or sells immediately at the best price currently available, without setting a price limit.
The market order is the simplest instruction you can give a broker: buy now or sell now. It is the default on many trading apps, and in calm, liquid markets it usually fills within a fraction of a second at almost exactly the quoted price. But a market order promises speed, not price — and the gap between the two is where beginners lose money without noticing.
- Category
- Order Types
- Reading time
- 7 min
- Also called
- Market buy, Market sell, Buy at market
- Updated
A market order in plain words
Imagine a market stall with apples priced from different sellers: some at $1.00, some at $1.02, some at $1.05. If you say “I’ll take 10 apples, whatever they cost”, you get the cheapest ones first, then the next cheapest, until you have ten. That is a market order.
You are guaranteed to get your apples (if there are enough sellers), but you did not choose the price. In a quiet market everyone sells at about the same price and it does not matter. In a busy or thin market, it can matter a lot.
How a market order is filled, step by step
This describes a market buy order for shares. A market sell works the same way in reverse.
You see a quote
Your app shows a bid (the highest price buyers are offering) and an ask (the lowest price sellers will accept). A market buy will pay the ask; a market sell will receive the bid.1 The difference is the bid-ask spread.
You place the order
A market order is an instruction to buy or sell at the best available price, and it is generally executed immediately — but the execution price is not guaranteed.2
Your broker routes it to a trading venue
The order is sent to an exchange or other venue, where it is matched against the best available opposite orders in the order book.
It fills against the best prices first
If the cheapest ask does not have enough shares for your whole order, the rest fills at the next price level, and so on. Parts of a large market order can therefore execute at different prices.2
Worked examples
Example 1 — A small order in a liquid stock
LiquidA stock is quoted $49.98 bid / $50.02 ask, with thousands of shares at each price. You place a market order to buy 100 shares.
| Price paid (the ask) | $50.02 |
| Cost (100 × $50.02) | $5,002.00 |
| Value at the bid straight after buying | $4,998.00 |
| Cost of crossing the spread | −$4.00 |
In liquid markets a market order is fast and cheap. Its main cost is the spread, which is small here.
Example 2 — A large order “walks the book”
SlippageThe best offer is $3.00, but only 500 shares are available there; 300 more are offered at $3.01 and 400 at $3.03. You buy 1,000 shares at market.
| 500 shares at $3.00 | $1,500.00 |
| 300 shares at $3.01 | $903.00 |
| 200 shares at $3.03 | $606.00 |
| Total for 1,000 shares | $3,009.00 |
| Average price vs. the $3.00 quote | $3.009 (+0.3%) |
You were quoted $3.00 but paid an average of $3.009. On a low-priced or thinly traded stock, a bigger order can move the price much further.
Example 3 — A market order in a fast market
Fast marketJust after major news, a stock quoted at $20.00 is moving several cents a second. Your market buy for 200 shares reaches the venue after the price has jumped.
| Price on screen when you clicked | $20.00 |
| Actual fill | $20.35 |
| Extra cost (200 × $0.35) | −$70.00 |
Market orders are most dangerous exactly when people are most tempted to use them: during sharp moves, around news, and outside regular trading hours.
A market order takes liquidity level by level
Market order vs. limit order
| Aspect | Market order | Limit order |
|---|---|---|
| Execution | Generally immediate2 | Only if the price reaches your limit2 |
| Price | Not guaranteed | Your limit price or better |
| Main risk | Paying more (or receiving less) than expected | Not being filled at all |
| Best for | Small orders in liquid markets when speed matters | Controlling price, thin markets, extended hours |
When traders use market orders
Getting out quickly
When a position must be closed now — for example because the reason for the trade is gone — certainty of execution matters more than a few cents.
Liquid instruments
In heavily traded stocks, ETFs or major currency pairs with tight spreads, the cost of a market order is usually small.
Inside stop orders
A standard stop order becomes a market order when triggered, which is why stops can fill at worse prices in fast markets. See Stop Loss.
Small orders
An order much smaller than the size available at the best price will normally fill at that price.
Advantages and disadvantages
Advantages
- Generally fills immediately.2
- Simple: no price to choose.
- Near-certain execution in liquid markets.
Going deeper
Read as far as you need. Each level builds on the one before it.
Check the spread before you click
Beginner
Look at both the bid and the ask, not only the last price. If the gap between them is large relative to the price, a market order will cost you that gap immediately. A limit order is usually the better choice.
Order size, liquidity and timing
Intermediate
Compare your order with the number of shares shown at the best price. If your order is larger, expect to fill at several prices. Splitting it, or using limit orders, reduces the impact.
Outside regular hours, trading is thinner and spreads are generally wider; for that reason many brokers accept only limit orders in extended-hours sessions.3
Routing, protection and timing instructions
Advanced
Unless you specify otherwise, orders are generally day orders that cancel at the end of regular trading hours if not executed.2 For a market order this rarely matters, but it does if the market is closed when you place it: the order may execute at the next open, possibly after a gap.
Some platforms add price protection that converts or caps market orders far from the last price; others do not. On crypto exchanges, a market order in a thin order book can move the price significantly. Read your platform’s order-handling rules before relying on market orders in volatile assets.
Common mistakes
Placing a market order before the open
An order entered overnight can fill at the opening price, which may be far from the previous close after news.
Using market orders in thinly traded assets
Small stocks, low-volume ETFs and minor crypto tokens can have wide spreads and little depth, so a market order may fill far from the quote.
Watching only the last price
The last price is history. What you will pay is the current ask, and what you will receive is the current bid.2
Chasing a fast move
Buying at market during a spike usually means buying at the top of the spike.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- A market order buys or sells immediately at the best available price, without a price limit.
- Execution is generally immediate; the price is not guaranteed.
- Buy orders pay the ask and sell orders receive the bid, so every market order pays the spread.
- Large orders, thin markets, fast moves and extended hours make market orders expensive — use limit orders there.
Frequently asked questions
Why did my market order fill at a different price from the one I saw?
Can a market order fail to fill?
Should I use market orders for crypto?
Further learning
- Limit Order
The alternative when price matters more than speed.
- Bid-Ask Spread
The cost every market order pays.
- Stop Loss
Stop orders turn into market orders when triggered.
- Slippage
Why the fill differs from the price you saw.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- Investor.gov (SEC). Bid Price/Ask Price (glossary) (opens in a new tab) Checked .
- Investor.gov (SEC). Understanding Order Types – Investor Bulletin (opens in a new tab) Checked .
- Investor.gov (SEC). Extended-Hours Trading: Investor Bulletin (opens in a new tab) Checked .
Read more elsewhere
- Trading Metrics (our sister site): Slippage (opens in a new tab)
- Investopedia: Market Order (opens in a new tab)
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. Trading Metrics is our sister site, under the same ownership; we are not affiliated with any other publisher linked above. Last reviewed . Report an error or request a source credit.