🔵 A market order is an order to execute a trade as quickly as possible at the current market price. It means that the price of the security is secondary to the speed of completing the trade.

🔵 A market order immediately becomes an open position and is subject to fluctuations in the market. This type of order will usually execute at or near the current BID (for a sell order) or ASK (for a buy order) price.

For example, the bid-ask prices for a company shares are $23.50 and $25, respectively, with 200 shares available at the ask. If a trader places a market order to buy 400 shares, the first 200 will be filled at $25.

The next 200, fill at the best asking price for sellers of the next 200 shares. If the stock is not traded very frequently, the next 200 shares might be executed at $26 or more.

This is why it’s better to use limit orders for these types of securities.

🧑‍💻 Learn what is a Limit Order here.

The Golden Rule in Trading

🔵 Buy Orders – You always BUY (open) at the ask price.
🔵 Sell Orders – You always SELL (open) at the bid price.

❗️Remember – In the charts, you usually see the BID price (SELL price, no spread)

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