Technically What does Market order Mean?

Technically What does Market order Mean?

Is it mean for infinite Price?

Check section 9.4 from the following link -

You should understand price-time priority concept. Firstly, NSE server is so powerful that it could distinguish even fraction of milliseconds to identify who placed the order first.

Secondly, NSE server is too fast that it can execute first market order immediately, before the second market order is received by the server.

Market orders are driven by people who place limit orders and are waiting in the queue. Once server receives the market order, it immediately serves the limit order people, by fulfilling their orders based on the queue.

The queue is formed purely based on price as first priority and limit order placement time as second priority. This book where the orders are queued is called ELOB, Electronic Limit Order Book.

Market orders are not queued instead they get executed immediately.

When market order quantity is so high, that the entries in ELOB are fully executed but still some market order quantity pending, then pending quantity is converted to limit order and taken as a entry in ELOB for next possible execution. This could happen with illiquid stocks or F&O contracts which have no activity.

If you need examples, let me know.

1 Like

You Mean technically Infinite?
Eg: ITC is Trading @Rs.350 If I place a buy order @Market .
at a same time another person place a buy order @Rs1000(Just example) which order will get filled first?

@AastroGuru, beautifully explained. Very neat. Thanks.