Market Order Guide 2025: How Australian Investors Can Trade Smarter

If you’ve dabbled in shares or ETFs, you’ve probably seen the option to place a ‘market order’. But what exactly does it mean, and how should you use market orders in Australia’s fast-evolving trading environment in 2025? Let’s break down what every savvy investor needs to know.

What Is a Market Order?

A market order is an instruction to buy or sell a security—like a share, ETF, or even crypto—immediately at the best available price. Unlike limit orders, which set a specific price you’re willing to accept, market orders prioritise speed and execution. They’re the default choice for many investors who want in or out of a position quickly, without fussing over a few cents of price difference.

• Buy market order: You purchase at the lowest price currently offered by sellers.

• Sell market order: You sell at the highest price buyers are currently willing to pay.

For example, if BHP shares are quoted at $48.75/$48.80 (bid/ask), a buy market order will likely execute at $48.80 per share—the lowest ask in the market at that moment.

Why Market Orders Matter in 2025

Australian markets have seen a surge in retail investing and trading technology in the past year. With the ASX rolling out even faster settlement cycles (T+1) in late 2024 and increased after-hours trading, market orders have become even more relevant. Here’s why:

• Instant Execution: In volatile markets, speed matters. A market order gives you near-instant execution, which is crucial when reacting to breaking news or earnings reports.

• Greater Liquidity: Many popular ASX stocks and ETFs have tighter bid-ask spreads in 2025, meaning market orders can be executed with less price slippage than in the past.

• Mobile Trading: With mobile-first brokerages like Stake and Superhero growing in popularity, market orders are just a tap away for everyday Aussies—making them the go-to order type for many.

However, in periods of extreme volatility (think March 2020 or the lithium stock rollercoaster of late 2024), market orders can sometimes execute at less-than-ideal prices if there’s a sudden gap in liquidity.

When (and When Not) to Use a Market Order

Market orders are best suited for highly liquid securities where you’re comfortable with the current quoted price. But they’re not always the right choice. Here’s how to decide:

Use a market order if:

- You’re trading blue-chip ASX stocks or major ETFs with deep liquidity.

- You want to enter or exit a position quickly and the quoted spread is tight.

- You’re acting on time-sensitive news and can’t risk missing a price move.

Avoid market orders if:

- You’re trading small-cap or illiquid shares, where a market order could trigger a big price jump (slippage).

- You’re worried about after-hours or pre-market volatility, when spreads can widen dramatically.

- You want strict control over the price you pay or receive—consider a limit order instead.

For example, if you want to buy shares in a thinly-traded mining explorer, using a market order during a news spike could see you paying much more than expected. In contrast, buying a market-leading ETF like VAS with a market order is typically low-risk, as the spread is just a cent or two.

Best Practices for Market Orders in Australia

To get the most out of market orders in 2025, keep these tips in mind:

• Check the bid-ask spread before you trade. The smaller the spread, the safer your market order.

• Trade during normal ASX hours (10am–4pm AEST) for best liquidity and pricing.

• Watch for major news events that can cause wild swings—market orders may fill at unpredictable prices during these times.

• Review your broker’s execution policy. Some low-cost apps route orders differently, which can affect speed and price.

With ASIC tightening regulations on trade execution transparency in 2025, brokers must now clearly disclose how they handle client market orders—so you can make more informed choices.

The Bottom Line

Market orders remain a powerful tool for Aussie investors, especially as technology makes trading faster and more accessible. Used wisely, they help you act on opportunities in real time. But always be aware of liquidity and potential price swings. Want to sharpen your trading toolkit? Stay tuned to Cockatoo for more deep dives into the mechanics of smarter investing.