What is a Market Order in Trading?

A market order is an instruction to buy or sell an asset “immediately” at the best available price in the market. It prioritises execution rather than a specific price. While setting up a market order, the trader does not specify the exact execution price. The order is matched with available buyers or sellers in the market.

For example, 

• Suppose a stock is currently trading around ₹500.
• Now, a market buy order may execute at ₹500.05, ₹500.10, or another available price depending on market conditions and liquidity.

Furthermore, the actual execution price can even differ from the displayed price. This variation is known as “slippage” and may particularly happen during periods of high volatility or low liquidity.

Market Order vs Limit Order: How Do They Differ?

The primary difference between a market order vs limit order lies in the priority given to execution and price. Let’s understand in detail:

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