Market Order
An instruction to buy or sell immediately at the best price currently available in the order book.
How it is identified
Test: the order specifies quantity but no price, and executes against resting orders until filled
Unit
qualitative
In depth
A market order guarantees execution but not price — it takes whatever the book offers, level by level, until the quantity is filled. In a liquid stock that is a rounding error; in a thin one it can fill catastrophically far from the last traded price, which is why exchanges cap how far a market order may travel. It is the right tool when getting out matters more than the last few paise, and the wrong tool in the opening minutes, in illiquid stocks, and in far out-of-the-money options. The intuition that a market order fills 'at the market price' is exactly the misunderstanding to unlearn.
Worked example
A market buy for 5,000 shares meets asks of 500 at ₹250.10, 1,500 at ₹250.30 and 3,000 at ₹251.00. Average fill = (500 x 250.10 + 1,500 x 250.30 + 3,000 x 251.00) / 5,000 = ₹250.68, some 0.23% above the best ask.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Market Order” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.