When To Use And How To Place A Market Order (MKT)

A market orders (MKT) simply tells your broker to buy or sell at the current market price. This is the most common order and it is used when you want to get the order executed immediately at the "market price". So this is preferable in fast market conditions or when you want to ensure that a position is taken and to protect against missing an opportunity. The broker will attempt to buy or sell the security at the current market price, whatever that price whatever that price may be. In an active market, market orders will always get filled, but not necessarily at the exact price that the trader intended. For example, a trader might place a market order when the best price is 30.00, but other orders might get filled first, and the trader's order might get filled at 30.01 instead. Market orders are used when you definitely want your order to be processed, and are willing to risk getting a slightly different price.

THERE IS NO SPECIFIED PRICE FOR THE MARKET ORDER

Example: Price of a stock ABC is: bid 30.00 ask 30.01

You place a market order, and it should be executed at the best ask, in this case it is 30.01. But, using a market order we instruct our broker that to us, it is more important that trade is executed, that at what price! As a result, our order can be executed at different price, for example at 30.02, because of a time lag between the moment we sent the orders and when it got to the exchange. But as a result, our order will definitely be executed.

Good thing about this type of order is that if you are in a loosing position  and want to close it immediately at whatever price is offered, then this is a type of order for you, because you will always get executed.

Bad part is the fact that if you use this type of order in illiquid stocks (or ETFs, futures etc), then your trade might be executed at worst price than the one you have expected.