An Introduction to Market Orders

What Is A Market Order?

A Market Order is an instruction by a trader to buy or sell digital assets at the prevailing market price, without a specified price limit. A Market Order is often the default choice for buying and selling assets for most traders. If the asset is highly liquid, plenty of willing buyers and sellers will be available to complete the trade. In a highly liquid market, the Market Order will be completed almost instantaneously at a price very close to the latest posted price that the trader can see. Since Market Orders get filled almost immediately, they are considered market takers, making the trading fees a bit higher than that of market makers since a Market Order "takes away" liquidity.

When Market Orders Are Useful

Market Orders are useful when getting an order filled quickly is more important than getting it filled at an exact price. Traders should only use market orders if they are willing to pay higher prices and fees caused by slippage. In other words, market orders should be used if traders are in a rush to place an order and ideally when there is a highly liquid market for the asset being traded.

When To Avoid Market Orders

Market Orders are less reliable when trading  illiquid assets. Because these assets are thinly traded, the bid-ask spreads tend to be wide. As a result, Market Orders get filled slowly and often at disappointing prices.

Market Orders Vs Limit Orders

A Market Order is often  contrasted with a Limit Order, which is when a trader wants to buy or sell a digital asset at a specified price or better. Traders utilize a Limit Order to specify a maximum or minimum price at which the trader is willing to buy or sell. 

How To Place A Market Order On AscendEX?

Let's say a trader wants to buy BTC on AscendEX at the prevailing market price. After logging in to their AscendEX account, a trader will choose the trading pair they want (USDT/BTC) and go to the trading page. Then, they will find the Market Order tab, set the amount they wish to trade, and click the Buy button Once clicked, the order will be filled immediately at the best available market price. 

AscendEX users can start trading using Market Orders HERE.