Question

Suppose an investor needs to buy or sell a stock instantaneously and he wants to take advantage of momentum and capitalize on expected changes in price of that particular stock. What sort of order should he place under such scenario?

Explain your answer

Answer 1

If the investor needs to buy or sell a stock instantaneously, then he should be placing MARKET ORDER in order to gain from the momentum of the stock and capitalise upon the quick gain because market order will be getting executed at affordable prices, and it is getting available at the best bidding price or best selling price as per the order of investor so it will get executed under any circumstances.

Hence the investor should be placing MARKET ORDER in order to gain from instant movement of the stock.