You’re staring at the screen. The market is moving and you've decided: it's time to act. You don't need the perfect price—you need speed. That’s when you reach for the simplest, fastest tool in the trading shed: the market order.
Whether you’re entering a position quickly, exiting when needed, or just testing the waters with your first-ever trade, a market order is your no-frills, no-holds-barred entry ticket. It may not always be elegant, but it gets the job done.
In this guide, you’ll learn exactly what a market order is, how it works, when to use it, and how to avoid common pitfalls such as slippage and bad fills. If you want to trade faster and smarter, read on!
What is a market order?
A market order is an instruction to buy or sell a position immediately at the best available price.
In simple terms, you as the trader are saying, "Get me in or out of this trade as quickly as possible at whatever the current price is."
How market orders work
When you place a market order, the trading platform matches your order to existing orders on the order book immediately.
For a buy order, it will take whatever sellers are offering from the lowest price upward; for a sell order, it takes the highest bids available and works downward. The order keeps filling until the entire quantity you requested is traded.
For example, imagine Sam wants to go long 10 SOL at the market price, and the current price is about $50 per SOL. Suppose the order book has 8 SOL for sale at $50, and more sellers at $50.10. The moment Sam submits his market order:
- He buys 8 SOL at $50 (all that was available at $50).
- He buys the remaining 2 SOL at $50.10 (next best price), completing his 10 SOL long position at an average price slightly above $50.
When and why to use a market order
Use a market order when getting the trade done quickly matters more to you than getting an exact price.
Common situations include:
- Urgent trades: If you need to enter or exit a position immediately—for example, reacting to news or executing a stop-loss to avoid a big loss—a market order ensures it happens without delay.
- High liquidity or small size: If you’re trading a very liquid asset (with a tight bid-ask spread) or only a small quantity, a market order is usually fine. In these cases, the price impact and slippage tend to be minimal, so the convenience of an instant fill outweighs the tiny difference in price.
In these scenarios, the priority is speed over price control. The slight compromise on price is typically worth it to make sure the trade happens.
On the other hand, if getting a specific price is critical for you, that’s when you’d avoid a market order (and use a limit order instead).
Risks of using market orders
Market orders are easy to use, but be mindful of these potential pitfalls:
- Slippage: With a market order, the final price you get can change instantly. If the market is volatile or low on volume, your order might fill at a price quite different from the last price you saw. You could end up paying more or selling for less than expected.
- Large orders: If your order is big relative to the market’s depth, you might push the price against yourself as you buy or sell. Placing a huge market buy could drive the price up sharply as it eats through the order book. Similarly, a large market sell can slam the price down. In these cases, you get a worse average price on your trade. Traders avoid this by breaking large orders into smaller pieces rather than using one giant market order.
- Illiquid markets: In very illiquid or frenzied market conditions, market orders can be risky. You might trigger a trade at a very bad price if there are few orders on the other side. Also, note that many trading platforms charge higher fees for market orders since you’re taking liquidity. If the trade isn’t urgent, a limit order can help you control the price and may incur lower fees.
Market orders vs. limit orders
Let's compare market and limit orders:
- Execution vs. price: A market order typically executes immediately at the current available price—you'll usually trade right away, but the exact price isn't guaranteed. A limit order will execute only at your specified price or better—you lock in the price you want, but there’s no guarantee the trade will execute if the market doesn’t reach that price.
- When to use each: Use market orders when speed is essential or the market is very liquid and stable (so price differences are negligible). Use limit orders when the price is more important—for instance, with volatile or thinly traded assets, or when you have a specific target price in mind. Limit orders give you control and can prevent bad fills in a fast-moving market, but you have to be patient (sometimes the trade may not happen at all if the price never reaches your limit).
Market order trading with Phantom
Beyond spot trading, Phantom Perps enables eligible users in permitted jurisdictions to trade perpetual futures using market orders.
Most perps platforms today are designed for pros with complex trading features, which can be challenging and potentially dangerous for inexperienced users. But with Phantom’s intuitive, mobile-first design, you can easily open, close, and manage positions directly within your wallet. Even so, the same underlying risks apply, regardless of the fact that Phantom Perps may feel more straightforward to use.
FAQs
Disclaimer: This content is for general educational purposes only. It is not financial advice, investment guidance, or a solicitation to buy, sell, or trade any assets, products, or services. Past performance is not indicative of future results. Any examples or strategies discussed are for illustrative purposes only and should not be considered as recommendations. Perpetual futures are complex, high-risk instruments that are not suitable for all investors. Phantom Perps are not available everywhere. This guide is not intended for UK audiences.
