market order


Definition of market order

: an order to buy or sell securities or commodities immediately at the best price obtainable in the market

Examples of market order in a Sentence

Recent Examples on the Web

Europe is trying to preserve the existing free-market order, while trying to impose new rules on it, for instance by hitting tech giants with taxes and regulations. The Economist, "Emmanuel Macron, the new Teddy Roosevelt," 22 Mar. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'market order.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of market order

1909, in the meaning defined above

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Last Updated

12 Sep 2019

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Time Traveler for market order

The first known use of market order was in 1909

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More Definitions for market order

market order


Financial Definition of market order

What It Is

A market order is an order to trade a stock at the current market price.

If you do not give your broker additional instructions, the trade will automatically be entered as a market order.

How It Works

When using a market order, you're almost guaranteed that your order will be executed. When you call your broker and say, "Buy 10 shares of ABC stock," the broker will enter the trade as a market order and you will buy ABC at whatever price it is trading at when the order is fulfilled.

The downside is that the price you end up paying with your order is fulfilled may not be the price you were quoted before you decided to trade the stock. Trade execution is not instantaneous, and markets can move dramatically in very little time.

Why It Matters

Though market orders are popular among retail investors, many do not consider the risks involved.

A retail investor using market orders will rarely get his order filled at real-time prices. When using a market order, you're essentially saying you'll take any price that someone will offer you. This is particularly dangerous in volatile markets because your order to buy can be filled at a much higher price than you originally thought when you decided to buy. Similarly, your order to sell can be filled well below the price you were expecting.

An alternative to market orders are limit orders, which allow you to set a price at which you want to buy or sell.

Source: Investing Answers

More from Merriam-Webster on market order

Rhyming Dictionary: Words that rhyme with market order Encyclopedia article about market order

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