When an investor directs a securities broker to immediately buy or sell a security at the best available current market price with no restrictions on the buy/sell price or time of execution. By contrast, a limit order is a direction that sets a ceiling or floor price before one’s broker is authorized to buy or sell a given security.
Initiating a market order is generally considered the fastest and most reliable method for entering or exiting a securities trade. These directions tend to be best suited for securities traded at particularly high volumes.
Friend One: “You know how in footage of the New York Stock Exchange trading floor, all those securities guys are always yelling… seemingly to no one in particular?”
Friend Two: “Yeah. You think your throat would get sore.”
Friend One: “What do you think they are always yelling about?”
Friend Two: “They are probably relaying information to colleagues and executing market orders from investors.”
Friend One: “Oh. Sure. Or maybe they are just always having a collective nervous breakdown. Wall Street is tough, you know.”
Friend Two: “…Sure. Collective and perpetual nervous breakdown is probably it.”