Stock market order execution
I used to work on the software in the front office (and a bit of the middle office) of a brokerage firm. This page describes the process pretty well. Basically there are three parts: So to your question: how does an order get executed? ETFs work the same since they are effectively shares of a mutual fund's assets. True mutual fund shares work differently since they don't get traded in the market. They get traded at the end of the market as just a bookkeeping exercise. When you are placing an order with an online broker you should already know what exchange or exchanges that stock trades on. For example if you look up under Yahoo Finance: Notice how News Corp is traded both on the ASX and the Nasdaq. The difference is the shares traded on the ASX have the extension .AX, that is how you know the difference between them. When you are putting orders in with your online broker you will need to select the exchange you wish your order to go to (if your broker allows trading on multiple exchanges). So you should always know which exchange your order goes to.
The original poster's concern is valid.  Sometimes, market orders do get executed at seemingly ridiculous prices. In addition to Victor's reasons for using a market order, sometimes a seller does not care how low the price is.  For example, after a company goes broke, its stock continues to trade for a while.  This allows shareholders to realize their losses for tax purposes, and allows short-sellers to close out their positions.  A shareholder who is trying to realize a 10 dollar per share loss for tax purposes probably does not care whether he gets 10 cents per share or 0.001 cents per share, so a sell-at-market order makes sense. I would say it's a bit more complicated than that. Do you understand what a market maker does?  An ECN (electronic communication network) is a virtual exchange that works with market makers. Using a rebate structure that works by paying for orders adding liquidity and charges a fee for removing liquidity. So liquidity is created by encouraging what are essentially limit orders, orders that are outside of the current market price and therefore not immediately executable. These orders stay in the book and are filled when the price of the security moves and triggers them.  So direct answer is NYSE ARCA is where market makers do their jobs. These market makers can be floor traders or algorithmic. When you send an order through your brokerage, your broker has a number of options. Your order can be sent directly to an ECN/exchange like NYSE ARCA, sent to a market making firm like KCG Americas (formerly Knight Capital), or internalized. Internalization is when the broker uses an in house service to execute your trade. Brokerages must disclose what they do with orders. For example etrade's. https://content.etrade.com/etrade/powerpage/pdf/OrderRouting11AC6.pdf This is a good graphic showing what happens in general along with the names of some common liquidity providers. http://www.businessweek.com/articles/2012-12-20/how-your-buy-order-gets-filled Many of the Bitcoin exchanges mimic stock exchanges, though they're much more rudimentary offering only simple buy/sell/cancel orders.  It's fairly normal for retail stock brokerage accounts to allow other sorts of more complex orders, where once a certain criteria is met, (the price falls below some $ threshold, or has a movement greater than some %) then your order is executed.  The space between the current buy order and the current sell order is the bid/ask spread, it's not really about timing.  Person X will buy at $100, person Y will sell at $102.  If both had a price set at $101, they would just transact.  Both parties think they can do a little bit better than the current offer.  The width of the bid/ask spread is not universal by any means.  The current highest buy order and the current lowest sell order, are both the current price.  The current quoted market price is generally the price of the last transaction, whether it's buy or sell. That is mostly true, in most situations when there are more buy orders than sell orders (higher buy volume orders than sell volume orders), the price will generally move upwards and vice versa, when there are more sell orders than buy orders (higher sell volume orders than buy volume orders), the price will generally move downwards. Note that this does not always happen, but usually it does. You are also correct that for a trade to take place a buyer has to be matched with a seller (or the buy volume matched with the sell volume). But not all orders get executed as trades. Say there are 50 buy orders in the order book with a total volume of 100,000 shares and the highest buy order is currently at $10.00. On the other side there are only 10 sell orders in the order book with total volume of 10,000 shares and the lowest sell order is currently $10.05. At the moment there won't be a trade unless a new buyer or seller enters the market to match the opposing side, or an existing order gets amended upper or lower to match the opposing side. With more demand than supply in the order books what will be the most likely direction that this stock moves in? Most likely the price will move upwards. If a new buyer sees the price moving higher and then looks at the market depth, they would most likely place an order closer to the lowest sell order than the current highest buy order, say $10.01, to be first in line in case a market sell order is placed on the market. As new buy orders enter the market it drives the price higher and higher until the buy orders dry up. "I'm familiar with and have traded U.S.-listed LEAPS and I've always used the CBOE quotes page you linked to.  So, I too was surprised I couldn't find 3M (MMM) LEAPS quotes at that page, even after checking the ""List all options, LEAPS, Credit Options & Weeklys if avail."" radio button.  Used to work! Fortunately, I was able to get access to the full chain of option quotes from the CBOE's other quotes page:  Go to the ""Quotes & Data"" menu, then select Delayed Quotes - NEW!  Here's how: I think the new interface is terrible: it's too many steps to get to the information desired.  I preferred the all-in-one table of the Delayed Quotes Classic page, the one you linked to. As to why that classic page isn't yielding the full chain, I can only suggest it is a recently introduced bug (software defect).  I certainly was able to get LEAPS quotes from that page before. On Yahoo! Finance option quotes: I don't know why their chain is incomplete – I can't see the logic, for instance, as to why MMM Jan 2012 60 calls are missing.  I thought at first it may be lack of volume or open interest, but nope.  Anyway, I don't trust Yahoo! to provide accurate, reliable quotes anyway, having seen too many errors and missing data in particular in the feed of Canadian stocks, which I also trade. I rely on the exchange's quotes, and my broker's real-time quotes.  I check Yahoo! only for convenience sake, and when it actually matters I go to the other more reliable sources. For what it's worth, though, you can also get full chain option quotes at NASDAQ.  See here for the 3M (MMM) example then click on the ""Jan 12"" link near the top.  However, I would consider CBOE's quotes more definitive, since they are the options exchange." In simple terms, this is how the shares are traded, however most of the times market orders are placed. Consider below scenario( hypothetical scenario, there are just 2 traders) Buyer is ready to buy 10 shares @ 5$ and seller is ready to sell 10 shares @ 5.10$, both the orders will remain in open state, unless one wish to change his price, this is an example of limit order. Market orders If seller is ready to sell 10 shares @ 5$ and another 10 shares @5.05$, if buyer wants to buy 20 shares @ market price, then the trade will be executed for 10 shares @ 5$ and another 10 shares @ 5.05$ "Yes there is, it is called a One-Cancels-the-Other Order (OCO). Investopedia defines a OCO order as: Definition of 'One-Cancels-the-Other Order - OCO' A pair of orders stipulating that if one order is executed, then the   other order is automatically canceled. A one-cancels-the-other order   (OCO) combines a stop order with a limit order on an automated trading   platform. When either the stop or limit level is reached and the order   executed, the other order will be automatically canceled. Seasoned   traders use OCO orders to mitigate risk. I use CMC Markets in Australia, and they allow free conditional and OCO orders either when initially placing a buy order or after already buying a stock. See the Place New Order box below:  Once you have selected a stock to buy, the number of shares you want to buy and at what price you can place up to 3 conditional orders. The first condition is a ""Place order if..."" conditional order. Here you can place a condition that your buy order will only be placed onto the market if that condition is met first.  Say the stock last traded at $9.80 and you only want to place your order the next day if the stock price moves above the current resistance at $10.00. So you would Place order if Price is at or above $10.00. So if the next day the price moves up to $10 or above your order will be placed onto the market. The next two conditional orders form part of the OCO Orders. The second condition is a ""Stop loss"" conditional order. Here you place the price you want to sell at if the price drops to or past your stop loss price. It will only be placed on to the market if your buy order gets traded. So if you wanted to place your stop loss at $9.00, you would type in 9.00 in the box after ""If at or below ?"" and select if you want a limit or market order. The third condition is a ""Take profit"" conditional order. This allows you to take profits if the stock reaches a certain price. Say you wanted to take profits at 30%, that is if the price reached $13.00. So you would type in 13.00 in the box after ""If at or above ?"" and again select if you want a limit or market order. Once you have bought the stock if the stop order gets triggered then the take profit order gets cancelled automatically. If on the other hand the take profit order gets triggered then the stop loss order gets cancelled automatically. These OCO conditional orders can be placed either at the time you enter your buy order or after you have already bought the stock, and they can be edited or deleted at any time. The broker you use may have a different process for entering conditional and OCO orders such as these." "You can place the orders like you suggested.  This would be useful in a market that is moving quickly where you want to be reasonably sure of execution but don't want the full exposure of a market order.  This won't jump your spot in the queue though in the sense that you won't get ahead of other orders that are ""ready"" for execution just because you have crossed the spread aggressively."