This may happen with all market orders, Stop Out orders, Buy Stop, Sell Stop, and Stop Loss orders.
When these orders are triggered, the system sends a Market Order that is executed at the current price, which may differ from the declared price.
Other types of pending orders (Buy Limit, Sell Limit, and Take Profit) are mostly executed at the specified price and sometimes at a better price if available on the market at the time of execution.
Why might my market order not be executed at the price I expected?
Market orders are designed to execute as quickly as possible at the current market price, but they are not guaranteed to execute at a specific declared price. Here are some reasons why your market order might not have been executed at the price you expected:
- Market volatility: Prices can change rapidly in a volatile market, especially during news releases, earnings announcements, or economic events. The price you saw when placing the order might have shifted by the time it reached the market.
- Order routing and execution speed: The time it takes for your order to reach the exchange or liquidity provider can result in price changes.
- Liquidity: If there is low liquidity in the market, your order might be executed at a higher or lower price, depending on the availability of counterparties willing to trade at your desired price. For large orders, if there isn't enough volume at the current price, parts of the order may execute at progressively worse prices.
How to mitigate this
- Use limit orders: If you want to control the price at which your trade is executed, use a limit order instead of a market order.
- Monitor market conditions: Be cautious during high-volatility periods.