A request to purchase or sell an asset based upon the pricing of the market at the given moment. This is often placed on behalf of the individual by a brokerage firm.
Using a market order is akin to paying retail. There is no haggling over price. Instead, the person is basically saying to buy regardless of what it costs.
This works best with highly liquid assets that have a lot of volume. These tend to have very tight spreads between the bid and ask.
The main advantage of a market order is that it is a fast way to enter or exit a position.
Market orders can be applied to many different securities and asset classes. They can be used on:
- stocks
- bonds
- commodities
- cryptocurrency
- futures
- mutual funds
For times when this is not attractive, investors and traders then prefer the limit order.