Market order definition

A market order is an instruction to buy or sell an instrument immediately at the best available price. It prioritises execution speed over price control, so the fill price can differ from the quote you saw.

A market order buys at the lowest available ask price and sells at the highest available bid price. It usually fills almost instantly when liquidity is deep, as in major forex pairs, large-cap shares, major indices, and actively traded commodities.

A market order does not lock in a price. When the market moves fast or liquidity thins, the fill can land away from the last quote, and that gap is called slippage. A market order prioritises execution; a limit order prioritises price.

Market order Example

A stock CFD is quoted at bid USD 49.98 and ask USD 50.00. You place a market buy order.

The order fills at the best available ask price. With enough liquidity at USD 50.00, it fills at USD 50.00. If the market moves quickly, it may fill at USD 50.05 instead.

That USD 0.05 gap between the price you expected and the price you got is slippage.