A market order is a type of trading instruction that allows you to buy or sell a financial asset immediately at the best available price. This order type is commonly used by traders looking for quick execution without the need to specify a price. Understanding how market orders work can help you make informed trading decisions.
Key Features of Market Orders
- Immediate Execution: Market orders are executed as quickly as possible, making them ideal for traders who want to enter or exit a position without delay.
- Best Available Price: The execution price is determined by the current market conditions, meaning you may not know the exact price at which your order will be filled.
- Liquidity Requirement: For a market order to be executed, there must be sufficient liquidity in the market, which refers to the availability of buy and sell orders.
When to Use Market Orders
Ideal Use Cases
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Rapid Market Movements
- Cryptocurrency prices changing quickly
- Urgent need to enter or exit a position
- Prioritizing immediate execution over precise pricing
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Time-Sensitive Trades
- Taking advantage of short-term opportunities
- Avoiding potential future price drops
- Immediate portfolio rebalancing
Steps to Place a Market Buy Order on Coins.ph
1. Select the Market Order Tab: Navigate to the Spot Trade tab.
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on the Coins website
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on the Coins app |
2. Enter Your Amount: Specify how much cryptocurrency you wish to buy or sell. You can also use the slider tool to adjust your desired amount.
3. Confirm Your Order: Click on BUY or SELL to execute your order.
Note: After you place your order, the system will make use of the existing limit orders at the order book and execute various trades at the best prices.
For example, when doing a market sell for ~530 USDC (as seen on the screenshot below), the system will select the first three limit buy orders on the order book as they have:
(1) the highest buying prices, and
(2) enough volume/USDC amount to cover for how much you want to sell
Advantages and Disadvantages of Market Orders
Advantages
- Speed: Market orders are executed almost instantly, making them suitable for time-sensitive trades.
- Simplicity: They require minimal input from the trader, as you do not need to specify a price.
Disadvantages
- Price Uncertainty: Since market orders execute at prevailing prices, slippage can occur—this means you might pay more or receive less than expected due to rapid price changes.
- Not Suitable for Illiquid Assets: In markets with low trading volume, executing a market order may result in unfavorable prices.
How to view my market order history?
On the Coins website
- For open orders, you can view them under the Open Order tab.
- To cancel an order, click the Cancel icon directly.
- For filled orders, you can check them under the Order History tab to view the Executed Price of each trade.
On the Coins app
Both Open Order and Order History are accessible at the upper-right section of the Spot Trade page.
Frequently Asked Questions
Can market orders guarantee exact pricing?
No, market orders execute at the best available price, which may vary during transaction.