A market order is an order to quickly buy or sell at the best available current price.
It is an instruction from a trader to a broker to execute a trade immediately at the best available price.
Unlike a limit order, where orders are placed on the order book, market orders are executed instantly at the current market price.
A market order is the simplest type of order, with no specific price needed.
Provided there is enough liquidity in the market, they are usually executed very quickly.
With market orders, you do NOT have any control over the price at which your order is filled.
Your market order will be filled at the then market price which may be significantly WORSE than the prices visible when placing the order.
If you are happy to trade at or near the current market price, then a market order may be the best option.
When a market order has been executed, it is referred to as a “filled order“.
When should you use a market order?
Market orders are handy in situations where getting your order filled is more important than getting a specific price.
This means that you should only use market orders if you are willing to potentially pay a higher price due to slippage.
In other words, market orders should only be used if you are in a rush.
You might be in a rare situation where your stop loss order didn’t get filled, and you need to buy/sell as soon as possible.
So if you need to get into a trade right away or get yourself out of trouble, that’s when a market order can come in handy.