Market Execution is a way of executing trading orders in the financial market. It means that traders execute transactions at the current market price instead of at a predetermined price (limit price). In other words, once the transaction is submitted, the order will be immediately executed at the best price available in the market at that time.
Key features of Market Execution:
Flexibility of price：the price at which a market order is executed is not determined in advance, but is determined by the current supply and demand in the market. When a trader places an order, the system automatically selects the best available price to complete the transaction.
Transactions are instant：market executed orders are instantaneous, once a trader opens the buy or sell position, the trade is immediately completed at the current market price, making it suitable for fast-moving markets, especially for short-term traders.
Slippage：since prices may change slightly between the time an order is placed and the time it is executed, especially when the market is volatile, a trader may be able to trade at a higher or lower price than expected. This phenomenon is known as slippage. Slippage can be positive (in favour of the trader) or negative (against the trader).
Applicable asset types：market execution orders are commonly used in financial markets such as Foreign Exchange, Stocks, and Commodities, especially in highly liquid and fast-moving markets.
The contrary of Market Execution Order is Limit Order. Limit Orders allow traders to buy or sell at a specified price or better, but there is no guarantee of immediate execution. Market execution orders focus on speed and immediacy and are suitable for traders who want to enter or exit the market quickly.
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