Order Types In Share Market
There is six types of order in share market. Here is one of them Market Order. This is the first step of share market to know about order to safe your money.
Market Order
A market order is a type of order to buy or sell a security immediately at the best available price in the market. It ensures that the order gets executed quickly but does not guarantee the exact price at which it will be executed.
How It Works:
- When you place a market order, it gets matched with the best available bid (for a sell order) or ask (for a buy order).
- Market orders are ideal when speed of execution is more important than price precision.
- In fast-moving markets, the price can change rapidly, and you might end up paying or receiving a price that's significantly different from what you expected.
Characteristics of this order
✅ Fast Execution – The trade happens almost instantly.
❌ No Price Control – You might get a worse price if the market is moving fast or has low liquidity.
📌 Best for Liquid Stocks – Works best when there’s high trading volume and a tight bid-ask spread.
Example of a Market Order:
Buying with a Market Order
Let's say Stock XYZ is currently trading with the following order book:
Order Type | Price | Quantity |
Sell (Ask) | 100 Rs | 200 |
Sell (Ask) | 101 Rs | 300 |
Sell (Ask) | 102 Rs | 400 |
If you place a market buy order for 300 shares, it will be executed like this:
- 200 shares bought at 100 Rs (first available sell order)
- 100 shares bought at 101 Rs (next available sell order)
Since it's a market order, you don't control the price but get immediate execution.
Selling with a Market Order
Now, suppose the order book for buyers (bids) is:
Order Type | Price | Quantity |
Buy (Bid) | 98 Rs | 150 |
Buy (Bid) | 97 Rs | 200 |
Buy (Bid) | 96 Rs | 300 |
If you place a market sell order for 200 shares, it will be executed as follows:
- 150 shares sold at 99 Rs
- 50 shares sold at 98 Rs
