NISM Certifications · NISM-Series-VIII: Equity Derivatives · Trading Mechanism
Under the Indian exchange trading system, what does a 'Market Order' in the derivatives segment mean?
A market order is an order to buy or sell immediately at the best price available in the market. The trader specifies quantity but not price, so execution is prioritised over price. Limit and stop-loss orders, by contrast, carry a price condition.
- AAn order to buy or sell at the best price currently available in the marketCorrect
- BAn order that is executed only at a specified limit price
- CAn order that becomes active only when a trigger price is reached and then rests at limit
- DAn order that remains valid for the whole contract life
Explanation
A market order has no price specified and is matched immediately against the best available opposite orders. The limit-price description relates to limit orders, and the trigger description to stop-loss orders.
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