Definition of Market on Close Order
What is a "market on close" order?
A "market on close" order is also known as a MOC.
A "market on close" order is a market order that is to be executed as close to the closing price as humanly possible.
A "market order" is an order to buy or sell a stock at the best available price at that moment.
Example: A trader buys 500 shares of Microsoft. The stock is ramping up into the close, based on the fact that the market is expecting a strong earnings number from the company after the close.
You want to participate in as much of the run-up into the earnings report as you possibly can - however, you don't want to hold the stock through the report.
So you place a MOC order for your 500 shares. This will sell your shares via a market order at the end of the day.
Note: MOC orders can be handy if you need to exit a position before the end of the day, but aren't going to be around when the market actually closes.
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