Term: Market Order

A market order is an instruction to buy or sell a security immediately at whatever price is currently available, rather than at a price you specify. You are prioritizing speed and certainty of execution over price.

When you submit a market order, it goes to the exchange or your broker's routing system and matches against the best price sitting on the opposite side of the order book right now. A buy market order fills at the current ask price (what sellers are asking), and a sell market order fills at the current bid price (what buyers are offering). This is different from a limit order, where you set the exact price you're willing to accept and the order only fills if the market reaches it.

The nuance that trips people up is that "immediately" does not mean "at the price you last saw on your screen." Prices can move between the moment you glance at a quote and the moment your order actually reaches the market, especially in fast-moving or thinly traded stocks. On a stock with a tight spread and heavy volume, this gap is usually trivial. On a low-volume stock or during a sudden news spike, a market order can fill many cents or even dollars away from the price you expected, because it has to consume whatever orders are sitting on the book, level by level, until it's fully filled.

That "consuming multiple levels" effect is called slippage, and it's the main risk of a market order: you get your fill, guaranteed, but not a guaranteed price.