Market Order
A market order is an instruction to buy or sell immediately at the best prices currently available in the order book. It guarantees that the order executes, but not the exact price you get.
How a market order fills
A market buy order takes the cheapest sell offers waiting in the order book, starting with the lowest ask. If that offer is not big enough, the order moves on to the next price level, and the next, until it is fully filled. A market sell does the same with the highest bids. The price you see on the screen is usually just the best single offer, so a larger order can end up with a worse average price.
Because a market order takes liquidity from the book, exchanges charge it the taker fee, which is usually higher than the maker fee for orders that add liquidity.
An example
Say a coin's order book shows 100 units for sale at 10.00 dollars, 200 at 10.05 and 500 at 10.20. You place a market order for 400 units. You buy 100 at 10.00, 200 at 10.05 and 100 at 10.20, for an average of about 10.08 dollars, roughly 0.75 percent above the price you saw. That difference is slippage. In a thin market or during a sharp move, it can be much larger.
When it is useful
Market orders make sense when getting in or out right now matters more than the exact price, for example closing a position quickly, or trading small amounts in very liquid markets such as major coins on large exchanges, where the spread is narrow. Stop-loss orders often turn into market orders when triggered, so they execute even if the price gaps.
Risks and common mistakes
Using market orders on small, illiquid tokens can produce large slippage. During news, crashes or liquidation cascades, the book can thin out in seconds, and a market order may fill far from the last price. On decentralized exchanges, swaps behave like market orders, so traders set a maximum slippage tolerance; setting it very high invites sandwich attacks. A limit order is the alternative when price matters more than speed.
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Frequently asked questions
What is the difference between a market order and a limit order?
A market order executes immediately at whatever prices are available. A limit order executes only at your chosen price or better, and may not fill at all.
Why did my market order fill at a worse price than shown?
Your order was larger than the best offer, or the book changed before it arrived, so it filled across several price levels. That is slippage.
Are market orders more expensive?
Usually yes. They pay the taker fee and often cross the spread, while limit orders that rest in the book may qualify for lower maker fees.
Related terms
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