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Simple English definitions for legal terms
market order
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A quick definition of market order:
A market order is a type of instruction given to a broker to buy or sell a security immediately at the best available price in the market. It is different from a limit order, which specifies a particular price at which the trade should be executed. Market orders are quick and easy to execute, but the price at which the trade is executed may not be the same as the current market price due to fluctuations in the market.A more thorough explanation:
A market order is a type of instruction given to a broker to buy or sell a security immediately at the best available price in the market. This means that the investor is willing to accept the current market price, whatever it may be, in order to execute the trade quickly.
For example, if an investor wants to buy 100 shares of a company's stock and places a market order, the broker will execute the trade at the current market price, which may be higher or lower than the price the investor was hoping for.
Another example is if an investor wants to sell a security quickly and places a market order, the broker will execute the trade at the best available price in the market, which may be lower than the price the investor was hoping for.
Market orders are useful when an investor wants to execute a trade quickly and is willing to accept the current market price. However, they can be risky because the price at which the trade is executed may not be the price the investor was hoping for.