What is a market order and how does it work in a dealer mark

What is a market order and how does it work in a dealer market?

Solution

A market order is one in which the trade gets executed at the current market price. In a arket order, the dealer quotes a price and the trader puts in an order to sell or buy at the price prevailing. There is no flexibility in deciding the price in a market order which is a contrast to a limit order. Market order can guarantee execution for a liquid instrument but there is considerable price risk.