Sirwin
Sirwin

Trading 101 - Order Types: Market Orders

By TradingBull | TradingBull_articles | 15 Jan 2021


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A market order is an order to buy or sell an asset which is executed at the current market price.

A market order will match every orders at the opposite side of the order book until the total amount for the order has been fulfilled entirely.

Pros: Certainty of fast and full execution.

Cons: Price not warranted (floating execution price).

Example:

Currently, the order book for the pair ABC/USD on the exchange is as follow:

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You want to buy (bid) 10 ABC at market price. Once your order is placed, it will automatically (and nearly instantly) be matched (and executed) against the ask-offers of the opposite side (red side).

Consequently, you will instantly buy and obtain from the book:

0.0063 ABC at $9,472.9

6.841 ABC at $9,473.0

3.1527 ABC at $9,473.2

Total: 10 ABC

On average, you have paid $9,473.1 per ABC.

Placing a market order automatically results in paying the taker fees (taker, as matched/executed immediately).

 

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TradingBull
TradingBull

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