Market Order

A Market Order is an order to buy or sell a specified number of shares at a price close to the current market price.

Once your order is placed, your order will then be filled at the next best available price at or around the stock's current price.

Example: Suppose you want to buy 100 shares of Adobe Systems (ADBE), and it is currently trading at $30 per share. You would like to enter the position as close as possible to the current price ($30).

You place a Market Order to Buy 100 shares of ADBE. Now your broker will purchase 100 shares of ADBE stock at the next best available price, such as $30.10.

The main benefit of a Market Order is that your order is practically guaranteed that it is going to be filled.

The disadvantage of this type of order is that you are not guaranteed to have your order filled at a specific price. From the time you place your order to the time the order is filled the price may have changed dramatically, especially in fast moving markets.

Related Links...