Between market sessions, numerous factors can impact a stock’s price, such as the release of earnings, company news or economic data, or unexpected events that affect an entire industry, sector or the whole market. A market order placed when markets are closed would be executed at the next opening, at which time the stock’s price could be significantly different from its prior close. Market orders should generally be placed only while the market is open. When placing a market order, therefore, the current bid and offer prices are generally of greater value than the last trade price. The most recent trade price may not necessarily be current, however, particularly in the case of less-liquid stocks, whose last trade may have occurred minutes or hours ago, or in fast-moving markets when stock prices can change rapidly in a short period of time. A market order is generally appropriate when you think a stock is suitably priced, when you’re sure you want a fill on your order, or when you want immediate execution.Ī few caveats: A stock’s quote typically includes the highest bid (for sellers), lowest offer (for buyers), and the most recent trade price. Market orders are optimal when the primary concern is immediately executing the trade. A market order typically guarantees execution but does not guarantee a specific price. What is a market order and how does it work?Ī market order is an order to buy or sell a stock at the market’s best available current price. Here we’ll look at common stock order types, including market orders, limit orders, and stop-loss orders.
While some market factors are beyond your control, if you place your order with a clear understanding of how it will be received in the marketplace, you’re more likely to get the results you want. Whether you’re buying or selling a security, the type of order you place can have a significant effect on the execution you receive.
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It’s the knowledgeable investor-making decisions with a full understanding of the implications of various stock order types and conditions-who can make the most of the stock market’s potential. Many factors can affect trade executions. Environmental, Social and Governance (ESG) Investing.ADRs, Foreign Ordinaries & Canadian Stocks.Environmental, Social and Governance (ESG) ETFs.Environmental, Social and Governance (ESG) Mutual Funds.
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