What is a market order?

A market order buys or sells as quickly as possible against currently available quotes, without setting its own execution-price limit. In order-book-based crypto spot and derivatives markets, a market buy matches sell quotes first, and a market sell matches buy quotes first. It prioritizes prompt execution but does not lock in the final price.

How does a market buy order execute?

The order book records unfilled buy and sell quotes and quantities. After a market buy is submitted and passes the checks, the trading system starts with the lowest executable ask. If that level has insufficient quantity, it attempts the next level until the order’s requirements are met or a trading restriction is reached.

Market orders may be submitted by asset quantity or payment amount, depending on the product. The former specifies how much to buy or sell; the latter specifies how much money to use. The actual outcome must still be calculated using prices.

Consider a buy order for 5 units. The figures are hypothetical, not live market data. Quantities use the same unit, prices use the same quote currency, and quotes are assumed unchanged during execution, with no price protection reached.

Fill the first level. Buy 3 units at 100 for a trade value of 300, leaving 2 units needed.

Then fill the second level. Buy 2 units at 101 for a trade value of 202. The required quantity is complete, so the third level is not used.

Finally, check the result. Total trade value is 502 for 5 units, giving an average execution price of 502 ÷ 5 = 100.4. Seeing a lowest ask of 100 before submission therefore does not mean the entire order can execute at 100.

A market sell works in the opposite direction: it starts at the highest executable bid and continues to subsequent lower bids as needed. All trade values above exclude fees.

What can make the execution price differ from expectations?

First, there may be insufficient quantity at the relevant prices. The more subsequent levels an order needs, the further its average price may deviate from the best quote. Distances between price levels also affect the deviation.

Second, quotes may change between submission and execution. When the order arrives, orders previously seen may already have traded or been withdrawn, and new quotes may have entered the market.

The comparison benchmark also matters. The latest traded price is a historical record; the best bid is the highest current buy quote; the best ask is the lowest sell quote; and the average execution price is the outcome of the actual order. If the lowest ask of 100 is the benchmark in the example, the average buy price is 0.4 higher. That is adverse slippage under this measurement, not an additional fee.

Review prices and quantities together when assessing a market order. Comparing only two prices before and after submission may miss differences in the quantity covered by execution.

Does a market order keep chasing prices until it fills completely?

It does not chase prices without limit. Platforms can set price protection and per-order quantity limits. If opposite-side orders within acceptable prices are insufficient, an order may fill partially or not at all.

Treatment of the remainder depends on product rules. For example, OKX cancels unfilled quantities of some directly submitted spot market orders, while derivatives market orders may update price limits and retry under the rules. “Market order” alone does not establish that a remainder is always immediately canceled or always keeps waiting.

A market order to close a derivatives position also requires checking actual executions and the remaining position. Submission alone does not establish that the position is now zero.

How are market-order fees calculated?

Executions that immediately match existing quotes have the taker role. Fees are calculated using the applicable taker rate and trade value or contract specifications. One order may have several executions; recording each separately is not duplicate charging. Unfilled quantity does not incur execution-based trading fees.

Unlike a limit order, a market order has no trader-set execution-price boundary. They are not absolute opposites of “guaranteed execution” and “guaranteed price”: a market order may fail to fill in full, and a limit order may fill immediately.

Related terms

Explore the bid-ask spread and IOC orders, or return to the crypto glossary.

References

• OKX: Basic order types
• OKX: Trading fee rules FAQ