It is request by the investor to broker or brokerage firm to buy or sell certain security such as stock, bond, commodity, cryptocurrency or derivatives at specific market price. A market order refer to buy or sell certain security at finest existing market price.
It is considered most reliable and fastest way to enter or exit a trade. Usually market order fill instantaneously for large cap liquid stock. Due to its high reliability, most brokerage firms include buy and sell button in their trading applications. By hitting the buy or sell button, market order is executed in no time.
Market order suits to stock and securities that are traded in high volume, such as large cap liquid stock. Market order for such stock and securities fill very rapidly without any issue. While it is different story with securities with little average daily volumes or low floats. Due to low trading volume, bid ask spread tend to be high, due to this market order sometime get filled very slowly. Slow executed market order often lead to meaningful trading costs.
Market order is considered most basic and reliable of all order, for that reason, they acquire the lowermost commission from both traditional and online brokers.