Market order — Definition | Polymarket Trade

In depth

At its core, a market order is a request to buy or sell an outcome immediately at whatever the best price is available right now. Instead of specifying a price you're willing to pay or accept, you're saying "I want this outcome immediately—at whatever price the market is offering." On Polymarket, this means your order executes against the standing order book in seconds, but you accept whatever the current bid or ask is rather than negotiating the price. It is the opposite of a limit order, which lets you pick your price and wait for someone to meet it.

The term "market order" comes from traditional stock and futures markets, where it has been the fastest way to enter or exit a position for over a century. In prediction markets like Polymarket, the concept carries the same speed advantage but with an important difference: because prediction markets often have smaller order books and wider spreads than stock markets, the cost of that speed—the price impact—can be noticeably higher. A market order takes you to the front of the queue by paying the premium of immediacy, which on Polymarket typically means accepting prices a few cents worse than the midpoint between the best bid and ask. Why does this matter in prediction markets? Because markets are still forming, liquidity concentrates around key price levels, and large trades can move prices sharply.

When you trade on Polymarket, you'll encounter market orders in two practical scenarios. First, if you want to enter a position quickly—say, a major news event just dropped and you believe the probability of a market will shift—you might place a market order to lock in a price before the order book reprices. Second, if you're closing an existing position and don't have time to wait for a limit order to fill, a market order gets you out immediately. Polymarket's interface typically shows you the expected fill price before you confirm, so you can see the exact cost of that speed trade-off before committing your capital. This transparency is crucial: you always know how much worse your execution will be compared to the current midpoint.

A common misconception is that market orders are always a bad deal. In reality, whether a market order makes sense depends on your urgency and the spread. If you're trading a highly liquid market like "Will Bitcoin exceed $100,000 by end of 2024?", the bid-ask spread might only be 1-2 cents, so the cost of a market order is negligible—your execution is nearly as good as the midpoint. But on a thin market with a 10-cent spread, a market order could give up real money just to avoid waiting a few seconds. Another misconception is that market orders guarantee execution at a single price. They do execute immediately against available liquidity, but if the order book is very shallow, you might only fill part of your desired size at the best price, with the remainder filling at progressively worse prices further down the book.

Market orders sit at one end of a spectrum, with limit orders at the other. Limit orders cost nothing in terms of spread but require patience and carry execution risk—your order might never fill if prices move against you. Market orders are the opposite: you pay the spread for guaranteed immediate execution. On Polymarket, understanding which tool to use hinges on whether you value speed or cost. Traders working with large position sizes often use a mix of both, starting with a limit order to catch better prices and switching to market orders only if they need out urgently or if the odds are about to move sharply in the wrong direction.