What Is a Market-on-Close (MOC) Order?
A market-on-close (MOC) order is a non-limit market order, which consumers execute as on the subject of without equal price as they can—each exactly at, or reasonably after {the marketplace} close. The purpose of a MOC order is to get the ultimate available price of that purchasing and promoting day. MOC orders aren’t available in all markets or from all brokers.
All MOC orders must be won at New York Stock Alternate (NYSE) markets via 15:50 ET, with the exception of entered to offset a published imbalance. NYSE markets’ regulations moreover restrict the cancellation or help throughout the measurement of any MOC order after 15:45 ET.
On the Nasdaq, all MOC orders must be won at Island via 15:55 ET, on the other hand will not be canceled or modified after 15:50 ET.
Key Takeaways
- A market-on-close (MOC) order is a non-limit market order that is finished at or after without equal of a stock industry.
- Patrons maximum regularly would place a MOC order in anticipation of a stock’s movement the next day.
- A surge of MOC orders can create industry imbalances at the end of the purchasing and promoting day.
Understading Market-on-Close (MOC) Orders
A market-on-close order is just a market order that is scheduled to industry at the close, at the most recent purchasing and promoting price. The MOC order remains dormant until just about the close, at which time it becomes vigorous. As quickly because the MOC order becomes vigorous, it behaves like a regular market order. MOC orders can help consumers to get into or out of {the marketplace} at the final price without a wish to place a market order straight away when {the marketplace} closes.
Patrons incessantly place MOC orders as part of a purchasing and promoting methodology. For instance, some consumers will want to cross out at the close via each buying or selling a given financial software if a undeniable price degree was breached all the way through the purchasing and promoting day. MOC orders do not specify a purpose price, on the other hand consumers now and again use MOC orders as a limit-order qualifier—on account of this {{that a}} limit order may well be mechanically canceled if it is not finished all the way through the purchasing and promoting day.
The usage of a MOC order in this manner promises that the specified transaction is finished, however it no doubt however would leave the investor exposed to end-of-day price movements.
Even supposing striking a market-on-close (MOC) order could make it conceivable to your acquire or advertise order will occur at the close of shopping for and promoting, it does no longer be certain the price.
Benefits and Risks of MOC Orders
There are a selection of scenarios in which an investor would most likely want to get without equal price of a security. If you happen to suspect that a company’s stock would most likely switch massively in one day—as the result of a scheduled after-hours source of revenue title or an anticipated data story, for instance—then striking a MOC order would be sure that your gain or sale would occur previous than the scoop breaks the next day.
MOC orders can also be at hand when an investor is acutely aware of that they’re no longer going to be available to execute an crucial transaction, like exiting a spot, at the end of the day. With the ability to place market-on-close orders could also be useful if you want to industry on some global exchanges that aren’t to your time zone.
An obvious downside of MOC orders is that, if you can no longer be supply at the close of {the marketplace}, then you really do not know at what price your order may well be crammed. In conjunction with risking end-of-day price fluctuations, MOC orders can also likelihood being poorly finished because of end-of-day purchasing and promoting clusters, despite the fact that this is unusual.
Example of an MOC Order
Suppose a broker owns 100 shares of company ABC, which is expected to record damaging source of revenue after without equal bell. ABC‘s source of revenue have didn’t surpass analysts’ expectations for a variety of quarters, on the other hand its stock price has no longer displayed antagonistic price movement all the way through the day. In an effort to lower losses from a selloff in ABC‘s shares after its source of revenue title, the broker places a MOC order to advertise all or part of their shares in ABC.
Correction—Jan. 30, 2023: This text has been up-to-the-minute to include the prevailing NYSE and Nasdaq regulations for entering/canceling/bettering MOC orders.
