Marktorder

Market Order: Definition, Example, and FAQs

What Is Marktorder?

A Marktorder (Market Order) is a type of order placed with a Broker to immediately buy or sell a Sicherheit at the best available current market price. It falls under the broader financial category of Trading and Order Types. The primary characteristic of a Marktorder is its emphasis on immediate Orderausführung rather than price certainty.³⁰, ³¹ When an investor submits a Marktorder, they are instructing their broker to complete the transaction as quickly as possible, accepting the prevailing price at that moment.²⁹ This type of order is commonly used when an investor prioritizes entering or exiting a position rapidly over achieving a specific price point.

History and Origin

The concept of executing trades at the prevailing market price is as old as organized financial markets themselves. Early forms of trading, dating back to the 1300s in Venice and the establishment of formal exchanges like the Amsterdam Stock Exchange in 1602, involved buyers and sellers directly agreeing on prices for immediate transactions.²⁶, ²⁷, ²⁸ While the modern, electronic "Marktorder" as we know it is a product of technological advancements in trading, the fundamental principle of prioritizing immediate execution at the best available price has been a cornerstone of market mechanics for centuries. The evolution from physical trading floors where orders were shouted out to sophisticated electronic matching systems has significantly enhanced the speed and efficiency of Marktorder execution.²⁴, ²⁵ The continuous auction system used by exchanges like the New York Stock Exchange (NYSE) relies on matching buy and sell orders based on price and time priority, ensuring that market orders are filled against the best available counterparties.²², ²³

Key Takeaways

A Marktorder prioritizes immediate execution over price certainty.
It is executed at the best available price in the market at the time of processing.
Market orders are highly dependent on market Liquidität and can be subject to price slippage in volatile or illiquid markets.
They are a common tool for investors who need to enter or exit positions quickly.
The actual execution price of a Marktorder may differ from the quoted price seen at the time of order entry.

Interpreting the Marktorder

A Marktorder is a directive for immediate action. When an Anleger places a Marktorder, they are signaling to the market that they are willing to accept the prevailing price to ensure the trade is completed without delay. ²¹In a highly liquid market, such as for heavily traded large-cap stocks, the execution price of a Marktorder will likely be very close to the last quoted price due to the narrow Geld-Brief-Spanne and abundant supply and demand. ¹⁹, ²⁰However, in less liquid markets or during periods of high Volatilität, the executed price may deviate significantly from the quoted price. This phenomenon is known as slippage. The interpretation of a Marktorder therefore hinges on the trade-off between guaranteed execution and potential price uncertainty.

¹⁷, ¹⁸## Hypothetical Example

Suppose an investor, Anna, wants to quickly buy shares of Company XYZ. The current quoted price for Company XYZ is €50.00 (bid) / €50.05 (ask). Anna decides to place a Marktorder to buy 100 shares.

Here's how it might play out:

Anna submits the Marktorder through her online Broker.
The order is routed to the Börse and is immediately filled at the best available ask price in the order book.
If there are enough shares available at €50.05, her entire order of 100 shares will be executed at €50.05 per share.
Total cost for Anna (excluding Transaktionskosten): 100 shares * €50.05/share = €5,005.00.

In a less liquid scenario, if only 50 shares were available at €50.05, and the next available price was €50.10 for the remaining 50 shares, Anna's Marktorder would be "split." She would buy 50 shares at €50.05 and 50 shares at €50.10, resulting in an average price slightly higher than €50.05.

Practical Applications

Marktorders are widely used in various Investition and trading contexts, especially when the speed of execution is paramount:

Urgent Entry/Exit: An investor might use a Marktorder to quickly enter a position if they believe a significant price movement is imminent and do not want to risk missing the opportunity. Conversely, they might use it to exit a position rapidly to limit potential losses, particularly in fast-moving or deteriorating market conditions.
Highly Liquid Securities: For securities with high Liquidität and tight Geld-Brief-Spannen, such as major exchange-traded funds (ETFs) or large-cap stocks, a Marktorder often results in an execution price very close to the quoted price, making it a reliable option for straightforward Aktienhandel.
Automated Trading S¹⁶ystems: In algorithmic and high-frequency trading, Marktorders are often employed due to their immediate execution characteristic. However, their use in automated systems requires careful design to mitigate the risks associated with rapid price changes and liquidity dynamics. The Securities and Exchan¹⁵ge Commission (SEC) has continually adapted rules to enhance disclosure of order execution information, reflecting the evolving landscape of electronic trading and the impact of various order types on market quality.

Limitations and Criti¹³, ¹⁴cisms

While advantageous for speed, Marktorders come with notable limitations and criticisms:

Price Uncertainty (Slippage): The most significant drawback is the lack of price guarantee. In volatile markets or for thinly traded securities, the executed price can be considerably worse than the last quoted price seen by the investor. This is known as slippage¹¹, ¹². For example, during the "Flash Crash" of May 6, 2010, many market orders were executed at drastically different prices than anticipated due to extreme Volatilität and a temporary breakdown in Liquidität. The SEC and CFTC later anal¹⁰yzed this event, highlighting the risks of market orders in stressed conditions.
Market Impact: Larg⁹e Marktorders, particularly in less liquid markets, can themselves move the market price against the investor, causing greater Transaktionskosten. This is because a large ord⁷, ⁸er might "sweep" through multiple price levels in the order book, consuming available liquidity at successively worse prices.
Vulnerability to Gaps: If a Marktorder is placed when the market is closed, it will be executed at the prevailing price when the market reopens. This can lead to significant price differences if there is a gap up or down in price overnight or over a weekend, potentially resulting in an unexpected and unfavorable Orderausführung.
Lack of [Risikomanagem⁶ent](https://diversification.com/term/risikomanagement): A pure Marktorder offers no built-in price protection. Investors looking to control their entry or exit price, or to limit potential losses, must combine Marktorders with other Handelsstrategie elements or use different order types.

Marktorder vs. Limitorde⁴, ⁵r

The Marktorder and the Limitorder are two fundamental types of trading orders that represent a core trade-off between execution speed and price control.

Feature	Marktorder	Limitorder
Execution	Immediate, at the best available market price. Guaranteed execution.	Only executed at a specified price (or better) or not at all. No guarantee of execution.
Price Certainty	No price certainty; susceptible to slippage, especially in volatile or illiquid markets.	Guarantees a specific price (or better), offering price certainty.
Priority	Highest priority in the order book for execution once submitted, as it accepts any available price.	Lower priority; sits in the order book until the specified price is reached or bettered.
Use Case	When speed is paramount, and the investor prioritizes getting into or out of a trade regardless of the exact price.	When an investor wants to control the price they pay or receive, and is willing to wait for a specific price.
Risk	Risk of adverse price slippage in illiquid or volatile conditions.	Risk of non-execution if the market price never reaches the specified limit price.

The primary point of confusion between the two lies in their respective priorities. A Marktorder prioritizes the certainty of execution, ensuring that the trade happens. In contrast, a Limitorder prioritizes price certainty, guaranteeing that if the trade occurs, it will be at or better than the specified price.

FAQs

When should I use a Marktorder?

You should consider using a Marktorder when the immediate execution of your trade is more important than the exact price you receive. This is often the case for highly liquid securities, where the price difference between the bid and ask is minimal, or when you need to enter or exit a position quickly due to rapidly changing market conditions or to rebalance your Portfolio.

Can a Marktorder be partially filled?

Yes, a Marktorder can be partially filled if there isn't enough Liquidität at the very best price to fill the entire order. The remaining portion of the order would then be filled at the next best available price, and so on, until the entire order is executed. This can lead to an average execution price that is different from the initial best bid or offer.

Are Marktorders safe to use in all market conditions?

Marktorders are generally safe in highly liquid and stable markets where there are many buyers and sellers and the Geld-Brief-Spanne is tight. However, they carry significant risk in volatile or illiquid market conditions. In such environments, the price can move rapidly between the time you place your order and its execution, leading to "slippage," where the actual execution price is significantly different and potentially unfavorable. For instance, during periods ², ³of high Volatilität or "flash crashes," market orders have been known to execute at extreme and unexpected prices.¹