What is a market order?

A market order is an instruction given by an investor to buy or sell a stock immediately at the best available current market price. This type of order is commonly used by traders who want to enter or exit a position quickly and prioritize execution speed over price certainty. When a market order is placed, it is filled as soon as there is a matching buyer or seller in the market, which means the transaction occurs at the prevailing market price at that moment.

Choosing this type of order gives traders immediate action since the goal is to ensure that the transaction takes place without delay, rather than trying to secure a specific price which can lead to missed trading opportunities. In contrast, other types of orders, such as limit orders or stop orders, allow for more strategic price conditions but do not guarantee immediate execution.