Market orders are a popular and straightforward type of order that allows traders to buy or sell an asset at the current market price.
What is a Market Order?
A market order is a type of order placed by a trader to buy or sell an asset at the best available price in the market. Unlike a limit order, which allows traders to specify a specific price, a market order does not set a price level. Instead, it instructs the exchange to execute the trade immediately at the current prevailing market price.
How Market Orders Work
Buy Market Order: A buy market order is used when a trader wants to purchase an asset at the current market price. When the trader places a buy market order, it is executed instantly at the best available ask price in the market. The trader pays the ask price, which is the price at which sellers are willing to sell the asset.
Sell Market Order: A sell market order is utilized when a trader wants to sell an asset at the current market price. When the trader places a sell market order, it is executed immediately at the best available bid price in the market. The trader receives the bid price, which is the price at which buyers are willing to purchase the asset.
Benefits of Market Orders
Speed and Efficiency: Market orders are executed instantly at the current market price, providing traders with swift and efficient trade execution.
Guaranteed Execution: Market orders are guaranteed to be executed, as long as there is sufficient liquidity in the market. This ensures that traders can enter or exit positions quickly without delays.
Flexibility: Market orders are versatile and can be used in various market conditions. They are ideal for traders who prioritize quick execution over specific price levels.
Useful in Volatile Markets: In highly volatile markets, prices can change rapidly. Market orders allow traders to capitalize on immediate opportunities without waiting for specific price levels to be reached.
Market orders are a straightforward and essential tool for traders seeking fast and efficient trade execution. They enable traders to enter or exit positions promptly at the best available market price. Market orders are particularly valuable in fast-paced and volatile markets, where traders need to act swiftly to take advantage of market opportunities.
Whether you are a day trader, swing trader, or investor, understanding and using market orders can greatly improve your trading experience. They provide a reliable way to execute trades quickly, ensuring you can capitalize on market movements and implement your trading strategies with ease.
How do I place a market order?
- Select the order type Market under the Buy or Sell tab. In this example, we are placing a buy order on the BTC-GBP trading pair
Enter the amount of BTC you would like to purchase. You can use the percentages listed below to help fill the amount.
Once the BTC amount has been entered, you will be provided an estimate of the price. Click the Preview Order button, double check the details and click Submit Order. Your limit order will be placed once you click this.
Things to note
- As per the Trading Principles: During periods of high volume, fast market conditions, illiquidity, or volatility in the marketplace, the actual price that a Market Order is executed at may be different from the best price indicated at the time of your Order, in some cases significantly so.
- It is not possible to cancel a market order after placing it, as they execute immediately.
- On Blockchain Exchange, after a market order matches against the book, any remaining size is cancelled. This is to protect larger orders from ripping through the order book.