What Is a Market Order?

A market order is an instruction by an investor to a broker to execute a trade (buy or sell) immediately at the market price. It does not guarantee a specified price, and the investor cannot control the done price of the order.

Is there anything I need to pay special attention to when placing a market order?

1) A market order is executed immediately at the market price, so it is possible for the order to be executed separately at different quantities/prices. The following are the queues for three bid-ask spreads for a security.

If you buy 5000 shares with a market order, the final trade result will be $3.88@2000, $3.89@3000

If you sell 5000 shares with a market order, the final trade result will be $3.87@1000, $3.86@2000, $3.85@2000

2) If the liquidity of an individual security is insufficient or there is no bid/ask, the order may not be executed in full or may not be executed at all, and the part not executed or the entire order will be automatically canceled.

3) Investors have no control over the price at which market orders are executed. When the market opens in the morning/noon, the done price may deviate due to the need to process orders hoarded before the market opens. Among them, off-market orders are more unpredictable.

4) The market order will lock the buying power at the current price * 1.2 market order multiplier, which may be adjusted according to market conditions. When the order is executed or canceled, part of the buying power (in addition to the transaction amount) will be released.

Under what circumstances will a market order be rejected?

In case of volatile market conditions, there is a chance that the market order cannot be matched in time and canceled due to the best bid/ask price fluctuating by more than 5 spreads before it is successfully sent to the exchange, or the order may not be accepted/executed due to other special circumstances (insufficient liquidity).

Therefore, we recommend that you log in to Longbridge App-"Portfolio"-" Past Orders" to check the execution status after submitting your order.