Market Order

A market order is a type of order to buy or sell a security immediately at the current market price. This order type guarantees execution but does not guarantee the execution price. Market orders are typically used by traders who want to enter or exit a position quickly and are willing to accept the current market price.

For example, if a trader wants to buy Shares of a company and places a market order when the Stock is trading at $50, the order will be executed at the best available price, which could be $50 or slightly higher depending on market fluctuations and available Shares.

In a case where a trader wants to sell Shares of a thinly traded Stock, placing a market order may result in the Shares bEINg sold at a significantly lower price than expected due to a lack of buyers at the desired price level, highlighting the risk of slippage.