1. A market order is either a buy or sell order that is executed immediately at current market prices.
a. The current market price for buying crypto is determined by the top Ask order on the orderbook.
b. The current market price for selling crypto is determined by the top Bid order on the orderbook.
In the case of the screenshot below, the top Bid order is MYR154,001.00 and the top Ask order is MYR155,000.00:
2. As long as there are buy and sell orders waiting on the orderbook, market orders are filled. Market orders are used when a trader prefers to immediately buy/sell instead of getting a specific price.
3. Traders using market orders cannot set the price. The order is filled at the best price available at the time of execution.
4. Market orders are taker orders because they immediately execute against existing orders on the orderbook. This means traders will pay taker fees upon execution.
Important:
1. A market order may be split across multiple orders on the other side of the transaction, resulting in different prices for some of the executed orders.
For example with the screenshot above:
a. If a trader uses market order to buy 0.13 BTC, the trader will pay all of the orders below (Listed in the red square in the picture above):
i. MYR155,000.00 x 0.097 BTC = MYR15,035.00
ii. MYR156,000.00 x 0.003 BTC = MYR468.00
iii. MYR157,750.00 x 0.01 BTC = MYR1,577.50
iv. MYR158,000.00 x 0.01 BTC = MYR1,580.00
v. MYR158,750.00 x 0.01 BTC = MYR1,587.50
The total BTC of the listed orders above is 0.13 BTC, which is matched by the system to the amount the trader wanted to buy. This can easily be checked with the amounts listed in the "Total" column in the orderbook.
The total amount to be paid is : MYR20,248.00.
Summary: If the market price is MYR155,000, it is only true for 0.097 BTC. The other prices depend on the orders queued below that order.
2. In fast-moving markets, the price paid or received may be different from the last price quoted before the order was entered. This is because there might have been executions between the time the trader presses the Buy/Sell button to the time the order reaches the server to be processed - a timespan of milliseconds - due to many traders executing orders at the same time.