Market order

A market order tells a broker to buy or sell a security right away at the best available price. It is the simplest and most common order type: the investor prioritizes speed and certainty of execution over control of the price. A market buy fills at the lowest ask price available; a market sell fills at the highest bid.

Because the order executes against whatever quotes are in the market at that moment, the fill price can differ from the last quoted price — especially in fast-moving or thinly traded securities. For example, if a stock's inside market is $50.00 bid, $50.10 ask, a market order to buy 100 shares should fill near $50.10, but a large order or a sudden price move could push part of the fill to a worse price. This gap between the expected and actual fill is often called slippage.

Market orders contrast with limit orders, which set a maximum purchase price or minimum sale price and therefore guarantee price but not execution. Stop orders sit in between: they become market orders once a trigger price is reached. Choosing among these order types is a core piece of trade execution and customer-recommendation questions.

The SIE, Series 7, Series 65, and Series 66 exams all test order types. Expect questions asking you to identify which order guarantees execution (market), which guarantees price (limit), and which order type suits an investor who wants to trade immediately regardless of small price differences.