What is a market order?

In stock markets there are different types of orders whish is used to buy and sell stocks. Primarily there are three orders types – market orders, limit orders, and stop orders. Well, in this article we will mainly focus on the market order. So, let us have a look at this type of order that exists in the stock market.

 

What is a market order?

A market order is a type of order that is used to buy or sell a stock at the current market price. However if you are a trader, you would not be guaranteed to get the exact price you wish but you can be quite sure that your order will take place. This is not the same with limit orders, where it is used to buy or sell a stock at a specified price. In limit orders, it is quite the opposite. Here in limit orders, the trader is not guaranteed that their orders will be executed but they can be quite sure that they would get the price they want. You can also get market-with-protection orders where the market order gets converted to limit orders when the price of the Indian stock market drastically changes between the execution and the placing of the order.

 

Advantages and disadvantages

Investors go for a market order because they find many advantages. The most important advantage that an investor gets in a market order is that the transaction is processed immediately. So you do not have to worry whether your stocks would hit a particular price. But every coin has two ends. So it cannot be said that a market order does not have any disadvantages. The most important drawback in a market order is that you cannot control the price that you are willing to pay for the stock. You might not realize the exact price that you expect whether you are buying or selling off your shares.

 

So, if you wish to know more about market orders, then you can get it on the Internet. You can also look for share tips if you wish. So, make a good research and invest your money wisely.

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