All market buy orders are placed as limit orders with a 5% collar for equities. This means that if the price of the stock moves 5% higher than the market price at which you placed your order, it won’t execute until it comes back within the 5% collar. Market sell orders for equities are not collared.
If you submit an order for equities during pre-market or extended-hours trading, we use the previous closing price to determine the collared amount. This means that if the stock opens 5% above the collar, your order won’t be executed until it falls back within the collar. Your order will be canceled at market close if the order goes unfilled.
Tip: If your buying power is within 5% of the total cost of your market order, you may not be able to place a market order. You can place a limit order instead to avoid the collar.
Note: All market orders for equities, if filled, receive the National Best Bid and Offer (NBBO) price because our executing brokers are bound by U.S. Securities and Exchange Commision Regulation NMS.