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Types of Orders: Market Orders
21 October 2013 05:11 PM

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Market Order is an order that lets you fill your order the fastest way. You can almost always expect your order to be filled, however this might not be at the best price you want. During volatile times the gap between the price you see when you enter the order and the price you get your order filled at may be wide, but when the market is fast moving this might be the only option in order to fill your position before the market moves further away.

When you click the market buy or sell button, you can expect the order to be filled at the price the market was trading when the participating qualified destination received your order. This price may not be the same market price you may have noted when you initially placed the order due to the size available when the order is processed. In order to provide clients with the best execution, the system automatically matches the client's order, with other orders and executes as a block or in multiple smaller transactions.

Example

Client 1 wants to open short position of 400,000 GBP/JPY using a Market order but currently one buyer has placed an order of volume 300,000 GBP/JPY at 1.5876 and another buyer has placed an order for a volume 200,000 GBP/ JPY at 1.5878. Thus Client 1 receives his short position of 400,000 GBP/JPY at 1.5877 because:

Open Market Order

Fig. 1
Please be aware that “Notice! At order by market execution the price will be quoted by dealer.” doesn't correspond to the ECN module.

When client uses the “Market Execution” to open position(s) he/she cannot add Stop Loss(es) and Take Profit(s) but, the system allows the addition of these parameters to already opened orders with the Modification mode. As you can see in fig. 1, the Quotes window's best price to open a Short position in GBP/USD is 1.62875 for the Volume of up to 10 standard Lots. The Client wants to open 7 Lots of GBP/USD and to open such a Short position, the Client has to click on the Sell by Market bottom.

Open Market Order Confirmation


Fig. 2

Immediately after a Market Order execution, the screen will show the Confirmation window (See Fig. 2). We can note that the Order was executed with the full requested volume, 7 Lots, at 1.62884 which is 0.00009 better than price in the Quotes window at the moment the opening was initiated. As said, the system automatically matches sell order with incoming prices from clients and Liquidity Providers enter the Marketplace just after the moment of initiating the short position. It can work in both directions and depends only on the liquidity of the Marketplace.

In the Client's Journal they could find logs detailing the open of the position:

  1. 2009.06.25 05:30:42 '2625': order sell market 7.00 GBPUSD sl: 0.00000 tp: 0.00000
  2. 2009.06.25 05:30:42 '2625': request was accepted by server2009
  3. 2009.06.25 05:30:42 '2625': request in process
  4. 2009.06.25 05:30:43 '2625': order was opened: #267378 sell 7.00 GBPUSD at 1.62884
    sl: 0.00000 tp: 0.00000

Close Market Order

Fig. 3

As you see on Fig. 3, the best price to close the Short position is 1.63075 with volume of 18 standard Lots. To close the position, the client has to click the Close #... sell 7.00 GBPUSD by Market on the bottom (Yellow Button).

Close Market Order Confirmation

Fig. 4

Immediately after the Close Market Order is executed, the screen displays the Confirmation window (See Fig. 4). We can note that the Order was executed with the full volume of 7 Lots at the 1.63074, which is 0.00001 worse than price in the Quotes window at the moment the closing was initiated. The system automatically matches the closing sell with incoming prices from clients and Liquidity Providers. The Client can find logs regarding the closing of this position in the Journal (see Fig. 4).

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