Market Order
A market order buys or sells immediately at the best available price. It is the simplest and fastest order type, but the fill price depends on current market conditions.
In plain terms: "Get me in (or out) right now — I accept the current price."
In This Article
How Market Orders Work
When you submit a market order, your broker sends it to the market (or executes against their liquidity) immediately. You are saying: "Fill me now at whatever price is available."
- Buy market order: fills at the current ask (the lowest price sellers will accept)
- Sell market order: fills at the current bid (the highest price buyers will pay)
- The difference between bid and ask is the spread — your first cost of entering
Market orders prioritise speed over price. You will almost always get filled, but not necessarily at the price you saw when you clicked.
Why Slippage Happens
Slippage is the difference between the price you expected and the price you actually got. It can be positive (you get a better price) or negative (you get a worse price).
Slippage happens because the market can move between the moment you click and the moment your order is filled. It's more common when:
- Markets are volatile (e.g. news events, economic releases)
- Liquidity is thin (e.g. exotic pairs, overnight sessions)
- You trade large sizes that "walk the book"
Key Point
Slippage is not necessarily a sign of broker manipulation — it's often a normal market condition.
When to Use Market Orders
Market orders are best when speed matters more than price. Common scenarios include:
- Exiting quickly to cut a loss or protect a profit
- Entering a fast-moving opportunity where waiting could mean missing it
- Trading very liquid markets (e.g. EUR/USD, major indices) where slippage is typically small
- Situations where certainty of execution outweighs price optimisation
If price matters more than speed, consider a limit order instead.
Example: Market Order on EUR/USD
EUR/USD is quoted as:
- Bid: 1.1000
- Ask: 1.1002
You place a market buy. You will typically fill at the ask: 1.1002.
But if a news release hits and the ask jumps to 1.1005 during execution, you may fill at 1.1005. That difference is slippage.
In calm conditions, slippage is often small. In volatile conditions, it can be large.
How to Reduce Bad Market Order Fills
You cannot eliminate execution risk, but you can reduce it:
- Trade liquid instruments where spreads and depth are better
- Avoid high-impact news if your strategy is not built for volatility
- Watch spreads: if spreads are unusually wide, execution conditions are usually poor
- Use sensible size: very large orders can "walk the book" and increase slippage
- Consider limit orders for planned entries/exits where price matters
Some platforms also offer "maximum deviation" or "slippage tolerance" settings, but those can lead to rejected fills.
Common Misconceptions
-
"Market orders always fill at the price I see on screen."
The displayed price can change before the order is filled, especially in fast markets. -
"Market orders are always worse than limit orders."
Not true. Market orders are useful when speed matters and liquidity is good. The right choice depends on your objective. -
"Slippage means the broker is cheating."
Slippage is often a normal market effect caused by volatility and limited liquidity at each price level.
✅ Quick Checkpoint
Test yourself. Try answering before expanding the model answers.
1) What does a market order prioritise?
2) Why can market orders experience slippage?
3) When is a market order a sensible choice?
If you can explain these points, you understand why market orders are powerful but not "free".
Frequently Asked Questions
Is a market order guaranteed to fill?
Is a market order the same as "instant execution"?
Should beginners use market orders?
How is a market order different from a limit order?
Summary
A market order buys or sells immediately at the best available price. It is the fastest and simplest order type, but it can expose you to spread and slippage, especially in volatile or illiquid conditions.
The key trade-off: execution speed versus price control.