What is a market-on-open order?

What is a market-on-open order?

Traders can enter time-specific trade orders in the form of opening or closing orders, which are only to be executed as close to the opening or closing price as possible.

Market-on-open orders are looking to buy or sell immediately after the market opens, at the opening price. Market-on-open orders are instructions for a broker or floor trader (even though we don’t see those much anymore these days) to buy or sell shares at opening price of the stock being traded.

There are other, similar orders, such as limit-on-open orders, which seek to trade just above/below (depending on whether we’re buying or selling) the market price. The opening (and closing) prices are named by the exchange and are settled at one time and at one price for all opening or closing orders. This maintains an orderly market.

Market-on-open orders are guaranteed to get the opening price, since the exchange will name one price to execute the opening orders in one block. Limit-on-open orders, and other variations, are only intended to get the best price possible, but do not have a guarantee besides the limit.

What is a Market-on-Close order?
What is a Market-With-Protection order?