What is the effect of a market order?

Market orders usually get executed immediately at the best prevailing prices in the market. The investor will not know the exact price at which the order will get executed while placing the order.

For instance, let’s assume that the LTP of ABC stock is 100 and the Best Bid is 99 & Best Offer is at 101. Upon placing a Market Buy Order, it will get executed at 101 as it is the best price at which there is a seller at that particular moment. Similarly, if you place a Market Sell Order, the trade will get executed at 99 as the best price at which there is a buyer is at 99.

If you are particular about executing trades at particular prices, then you must place limit orders.

Was this article helpful?


Related Articles