Market Order
A market order executes immediately at the best available prices, usually crossing the spread and paying taker costs.
Definition
A market order is an instruction to trade immediately. It typically matches against existing order book liquidity, meaning you often pay ask when buying and hit bid when selling.
Why it matters
Market orders are convenient but expensive. They usually cross the bid ask spread and can cause slippage, especially in thin markets. They can increase effective spread and total cost after trading fee.
Common pitfalls
Trading size in thin markets: Market orders can walk the book and create large price impact.
Assuming displayed prices are guaranteed: Quotes can change before you fill.