What is a Market Order?
A market order is an order to buy or sell a digital asset at the market’s current best available price. It’s also known as instant trading. The instruction issued by a market order is that to execute the trade immediately according to the current market price.
Example:
After you place a buy market order for 1 BTC, the system will immediately screen all the orders currently available on the book and have the order executed at the optimal price. If the optimal price available for the order is 10,000 USDT and the quantity is enough for execution, the order for 1 BTC will be immediately filled at 10,000 USDT. If the optimal price available for the order is 10,000 USDT, but there are only 0.8 BTC available with the price, the order will be partially filled for 0.8 BTC at 10,000 USDT, with the remaining 0.2 BTC to be matched with other available orders. At last, the market order will be filled for 0.8 BTC at 10,000 USDT and 0.2 BTC at 10,100 USDT.
Advantages and risks
Advantages: A market order typically ensures an instant execution to meet the needs of users who look for a fast entry into or exit from the market.
Risks: As the primary goal is to execute the trade immediately, the last trade price of the order is likely to deviate from the expected price, and the deviation might be even bigger, especially on fast-moving markets.
Factors need to be considered when placing a market order
1. The trade requirements of users. A market order makes it possible to instant entry to and exit from the market possible, but the last trade prices differ. It is generally inappropriate for users who have specific or precise requirements for order prices.
2. The liquidity of trading assets. The trade price of a market order and the expected price of a user would see a huge difference on a market with poor liquidity.
Please note: If a market order can be filled immediately with the order on the book, the system will determine whether the deviation between the trade price at the market depth and the order book price in the direction of the trade exceeds 10%. If within 10%, the order will be executed; if more than 10%, the order will be partially cancelled.
